ed to him, for his own demands. And when goods consigned to him remain in specie, they are not subject to his bankruptcy. So if a bill be remitted to him for a special purpose, and be not disposed of or paid away, when he becomes a bankrupt, it will be considered as the principal's, and by him recoverable in assumpsit, but subject to the factor's lien; but he must have actual possession. Cп. 30. Art. 2. Foxcraft & vonshire, cit § 2. In this case assumpsit was brought by the plts. for mon- 2 Burr. 931, ey had and received by the defts. The plts. were assignees al. assignees of the bankrupt. The defts. were his factors. He consigned of S. a bankgoods to them, which as his factors they sold, and the proceeds rupt . Dein their hands were £5314. 17s. 9d.; they paid several sums ed 2 Mor. to his order, and on his account. All these transactions took 275 to 292. place between his committing several secret acts of bankruptcy, in December, 1751, (after which he appeared abroad as usual) and his stopping payment, August, 1752. Lord Mansfield and the court said, a factor has a lien for commissions and expenses. "So on goods consinged, while they remain in his possession, for the items of general account with his principal;" but here the goods have been sold and turned into money. 3. If a creditor knows a trader is likely to break, and conceals it, and secures his own debt, even by threats of legal process, the law says this is no fraud. If a factor knows the circumstances of his principal to be desperate, and advances money on his bills to save him from immediate failure, it is no fraud, but a meritorious act; none but the lender can suffer by it. And if the factor trust to the arrival of goods to reimburse him, it is prudent, but no fraud. It is a paradox to say a man is guilty of a fraud, who lends his money, only with a prospect of being repaid. Men every where lend their money to traders on mortgages, consignments, and securities; because they suspect their circumstances, and will not run the risk of the general credit. A new trial was granted on the ground the defts. had a lien, not only for their commissions and charges on the sale, but for their said advances. 2 W. Bl. 1072. Maber v. § 4. If a bill be drawn on a factor, and payable out of goods in his hands, after paying prior acceptances, and this bill Massias. is accepted by him generally, he must pay it, though there be a balance due to him, in a running account with his principal. By his special promise he gives up his lien. 8. 5. This idea that a factor has a lien on goods while in his See post, art. possession, has been extended even to the proceeds of them, any action by him, or against him, may be affected accordingly. Cowp. 254. and 4 Burr. 2214, 6. In this case it was decided that a dyer not acting as a Green v. Far VOL. I mer.-Same, W. B, 651.—6 T. R. 258. Walker v. Birch, 77 CH. 30. 3 T. R. 119. ees of Sande factor, but merely as a manufacturer, has a lien only for dying the same goods, and not for other debts. If A deposit goods with B for sale, and B promises to pay the proceeds to A when sold, B has no lien on them, if not sold, for his balance of his general account, arising from other articles; for he deprives himself of this lien by his special promises to pay over the proceeds. ART. 3. Assumpsit by and against a factor; goods in transi783, Kinloch tu, &c. § 1. In this case Steine, the bankrupt, in Scotland, sent & al. assign a cargo of spirit thence to London by sea, to Sandiman & Co. man, v. Craig. in the course of his trade with them, and drew bills on them which they accepted, in confidence of receiving the cargo. They had £1200 a year in lieu of commission, and one fourth per cent. commissions, and five per cent. for monies advanced; bills of lading were sometimes sent, but more generally, not. When the said cargo arrived, Sandiman & Co. were under acceptances for £29,000, on account of Steine, £1200 whereof was for this very cargo; before which time they had received the bills of this cargo, unendorsed, and an invoice of the goods; and February 15, 1788, had insured the cargo in their own names, and at their own expense. This ship arrived February 21, the day after Sandiman & Co. had stopped payment; at which time they told the captain they were bankrupts, and did not think themselves authorized to meddle with the cargo; March 8, they paid him six guineas in part of the freight; March 15, he for the first time refused to deliver the goods to the assignees of Sandiman & Co. Steine had written to them to unload when the ship arrived; their bill had not been paid; Steine stopped payment February 23; and March 3, a sequestration was granted, under which Craig stopped the goods and sold them. Judgment for Craig, the deft., in favour of the title of Steine, the consiguor: First, because the consignor may stop goods in case of the insolvency of the consignee, before they get into his actual possession; for the contract between them is founded on the idea that the consignee is able to pay for them. A constructive possession is not sufficient. Second. The acceptance of a bill is never held equivalent to payment; for in case of the insolvency of the acceptor, the drawer most probably must pay it Third. A factor has a lien on all consignments for a general balance, with this restriction, that he has obtained actual possession of the cargo. Fourth. Payment of a part of the freight cannot be considered as taking possession of the goods. Fifth. The captain could only deliver the goods to Sandi man & Co., as factors, for without an endorsement of the bill of lading, he could not deliver the goods to them as owners. Sixth. If Sandiman & Co. had once got possession, then they might have insisted on their lien, and so far in this action have recovered the proceeds. The above judgment was affirmed in the House of Lords: and Seventh. Held farther, to be a case between principal and factor; so stopping in transitu was out of the question, which applies only as between vendor and vendee, as in 4 Burr. &c. Consignment above. CH. 30. Art 4. ART. 4. Case for not making insurance &c. § 1. If the 4Burr. 2050, principal order the factor to insure the goods, and he have Wright Campbell. monies of his principal's in his hands to pay the premium, and Mal. Lex he neglects the insurance and gives no notice, he shall pay the Mer. 86. loss; see Abrahams v. Davenport, art. 11. celles. § 2. This was an action of the case for not, insuring. In 2 T. R. 187, Feb. 1785, the plt. owing the deft. £850, mortgaged to him Smith v. Las the plt's. interest in the goods and freight, to pay August 1785. In July, 1785, the plt. in a letter enclosing the bill of lading, directed the deft. to get insurance on the goods and freight, being shipped from Dominico to London. This direction could not have been received before the mortgage became. absolute. The deft. got insurance on the goods, but not on the freight; the proof was, that the deft. received a letter from the plt. Verdict for the plt. ; and a new trial was refused on these principles: First. The plt. had an insurable interest in his right to redeem. Second. The application to the deft. to insure was in the usual course of trade, and he gave no notice of his dissent. Buller J. stated three general principles. First, "where a merchant abroad has effects in the hands of his correspondent here, he has a right to expect he will obey an order to insure; because he has a right to call these effects out of the other's hands when, and in what manner he pleases." Second. "Where the merchant abroad has no effects in the hands of his correspondent, yet if the course of dealing between them be such, that the one has used to send orders for insurance, and the other to comply with them, the former has a right to expect that his orders for insurance will still be obeyed, unless the latter give him notice to discontinue that course of dealing." Third. "If the merchant abroad send bills of lading to his correspondent here, he may ingraft on them an order to insure, as the implied condition on which the bills of lading shall be accepted, which the other must obey if he accept them, for it is one entire transaction." Here the deft. could not accept Cn. 30. 2 T. R. 198, Wallace r. Smith. Co- 2 Vesey 239, Tubal o. Short. Mal. Lex Reeves' D. R. 350.-Ca. Ch. 25, 76. 2 Vesey 39. Malloy 423. Mal. Lex -Chan. Ca. 76. the bill of lading, and reject the insurance, the same if the defts. had limited the broker to too small a premium, and hence no insurance. So if the factor make a blunder in the policy by which it is void; but he is not liable if he act diligently, and in the usual mode of doing business. But if a merchant direct his factor to insure, and he charges him with it as if done, and a loss happens, he is liable as insurer, but not as his agent. ART. 5. Factor answerable when he saves his own debt. If my factor sell his goods to A, payable at a future period on his own account and is paid at the time, and in the mean time lets my monies lie in A's hands unpaid, for goods such factor formerly sold, he shall answer for my monies, though he never receive them; for it is a fraud in him to neglect my debt when he collects his own. If he run his principal's goods or makes a false entry, he is answerable. When a factor may sue in his own name for the use of the principal, see post, art. 11. ART. 6. Where liable or not, on account of duties saved. Mer. 83, 103. 1. If a factor unawares or of purpose save the duties, and thereby the goods are forfeited, and this without the privity of the principal, he shall answer the value of them to the principal; otherwise, if the factor enter according to his letter of advice, or invoice. So if the factor take usury, he is liable if 3 Salk. 235. 5 Com. D 50. the debt be lost. 2. A factor of the East India company carried £1200 in gold to India, and there saved the duties due on it, and it was held, that this was at his peril, and that he and not the company should have the benefit of saving the duties, for they were bound to pay them, and therefore cannot make title to them against one who has the possession. 3. But it is otherwise if the factor does not pay the duties -Ca. Ch. 30. to his own government. And if he falsely enter his principal's goods at the custom-house, or run them, whereby they are seized, the factor must make good all the principal suffers, though the factor's commission be general. Cro. J. 265, 3 Mass. R. v. Nutting, admr. § 4. In this case the court decided, that if a factor abroad 436, Welman runs goods of his principal, and loses them by seizure, he must answer for them to him, unless, first, he conforms to the law of the place; or second, he was specially authorized by his principal to do as he did; or third, the property could not be otherwise managed, and that this fact was known to his principal when he made the consignment. 4 Mass. R. § 5. Held, that if one at his own risk engage to transport 115, Bridge v. goods against all dangers but those of the sea, and they are stolen ashore, he is liable to account to the consignor for the Austin. value at the place of shipment, deducting the agreed commis- CH. 30. sion. Where a third person is discharged of his promise to account for goods to the factor, by accounting for them to the owner, Ch. 9, a. 5, s. 10. Art. 8. Paterson v. ART. 7. A factor cannot pawn for his own debt his princi- Stra. 1178, pal's goods, or goods entrusted to him for sale, 5 Vesey jr. Tash. 5 T. 211. Agent cannot pledge his principal's stock. R. 614, Dau val.-7 East 1. In the year 1792, the plts. consigned goods to a broker bigny v. Duto be sold by him as their factor. In 1793, he pledged these 5, M'Combie with the defts. for £325. Judgment for the plts. ; and held, . Davies. that they need only tender to the factor what they owed him ; 648.-1 H. Bl. but need not tender his debt to the pledgee in order to re- 362. cover the goods, for the factor's power was to sell, not pledge his principal's goods. 1 Bos. & P. 398, Kinder v. Shaw. 1 East 335. 538. Secus as to bills endorsed blank. Bos. & P. 648, Collins v. Martin. 4 Johns. R. 103.-2 East § 2. In this case the plts. put into the hands of A. Carter, 2 Mass. R. a retail shopkeeper, the goods in question, under an agreement between him and the plts., that all goods so put into his hands should be sold on their account and risk, and should all be 6 East 17, distinctly marked with a large K, and kept separate from Carter's own goods. When any of them should be sold, the bills of parcels were to be so marked to shew they were the plt's. goods, so all monies or notes were to be immediately paid to them, and Carter was to be allowed a commission of five per cent., and an additional allowance in case a certain profit speci- 523.fied was made. Carter borrowed monies on his own account of 1 Maule & the defts., and pawned these goods as collateral security, and Sel. R. 140. delivered them, and the pawnees were to sell them if the terms of the loan were not complied with. The defts. were ignorant of the plt's. interest in the goods. Carter failed, and the plts. demanded these goods of the defts., the pawnees, and recovered in trover; though it was urged that the defts. had reason to think the goods were Carter's, who kept an open shop in which these goods were exposed to sale with his own. Newsom v. 3. Nor can the factor pledge the goods by pledging the 6 East 17, 44, bill of lading, but see 1 Bos. & P. 648, 651, as to endorsed Thornton. bills pledged, and to the amount of his lien. ART. 8. Where the price of goods sold is the factor's or the principal's. 408, Scott & 1. Assumpsit, money had and received. Plts., partners 7 East 5beyond sea, consigned tar to Scott, (other than the plt.) the Willes 400, bankrupt, as their factor. He sold it to C. & J. Owen, agreed al. . Surman to deduct £31 he owed them, and took their notes for the & al defts. balance, payable in four months. He became a bankrupt five assignees. days after the sale of the tar, and delivered the notes to his assignees, the defts., who received the monies due on them, and confirmed his sales; also received the bounty money allowed to importers. A. D. 1742. |