221. What is the duty of the seller with regard to the care of goods sold but not delivered?

The measure of diligence required of the seller in keeping the articles sold is that of a depository. He is obliged to exercise common and ordinary diligence, but not the most exact and scrupulous care. If the goods be destroyed in consequence of his gross neglect or direct fault, he will be responsible therefor even after default of the buyer to remove the goods according to his agreement.

222. What is the duty of the seller with respect to the shipment of goods to a distant place?

It is the duty of the seller to follow the buyer's directions with regard to the way of sending the goods, and if he disregard such orders, he is responsible for their loss in transportation. If no directions be given or if they be general, a seller who follows the usual course will be protected. On delivering goods to a carrier, the seller must be careful to secure to the consignee a remedy against the carrier by taking a receipt or bill of lading, and if they be sent by ship or otherwise, it is the seller's duty to notify the buyer of the fact so that he may insure them or take other precautions for their safety.

223. Is it the duty of a seller to INSURE GOODS in course of transportation to the buyer?

If it has been the usage between the parties for the seller to insure, or if he has received specific instructions to insure in any particular case, he must do so or be liable. for any loss occasioned by his negligence.

CHAPTER XVI.

BUYING AND SELLING MERCHANDISE.

6. SELLING BY AGENTS, AUCTIONEERS, BROKERS, ETC.

224. HAT are the principal classes of commercial agents?

Auctioneers, brokers, factors, or, as they

are usually called in the United States, commission merchants, are the principal classes into which commercial agents are divided.

225. What are the legal rights of AUCTIONEERS?

An auctioneer is a person authorized to sell goods or property at public auction, for a commission. Before the knocking down, he is exclusively agent of the seller; but after this he becomes also the agent of the purchaser, and the latter is presumed to give him authority, to write down his name as purchaser. The memorandum, so made, will bind both parties. A bid, however, is considered in the law as a mere offer, and may be retracted at any time before the knocking down, which signifies acceptance.

226. Is an auctioneer permitted to employ by-bidders, or to sell on credit?

An auctioneer has no right to place hindrances in the way of bidders, or to employ by-bidders to run up the price, and a buyer who discovers that he has done so may

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refuse to take the goods, even if the fraudulent act was done without the knowledge of their owner. An auctioneer, however, may withdraw any article offered, as a bidder may withdraw his bid before the article is "knocked down," but not afterwards; for then the sale is completed, and the ownership passes to the buyer. Neither an auctioneer nor a broker has a right to sell on credit unless this privilege is given him expressly, or by some known and established usage.

227. What is the legal definition of a BROKER?

A broker is an agent employed to negotiate between other parties, and he is presumed to act not in his own name, but in the names of those who employ him. Hence, if he sell the goods of his principal, in his own name, without some special authority, the principal will have the same rights and remedies as if the name had been disclosed. The purchaser in such case cannot set off a debt due him from the broker, against the claim of the principal, and payment cannot in general be safely made to a broker when the principal is known.

228. Are there instances where a broker may be entitled to his commission, even if the bargain be completed by another?

The rule with regard to charter-parties, effected through brokers, is said to be this: that if a broker recognized by both parties as their agent, "communicates to the merchant what the shipowner charges, and also communicates to the shipowner what the merchant will give, and he names the ship and the parties, so as to identify the transaction, and a charter-party be ultimately effected for that voyage, the broker is entitled to his commission; but if he

does not mention the names so as to identify the transaction, he does not get his commission, to the exclusion of another broker who afterwards introduces the parties to each other." This rule, it is probable, would apply in other contracts effected through brokers.

229. Where a property subject to incumbrances is sold through a broker, is he entitled to charge a commission on the gross amount of the sale?

In employing a broker or auctioneer, to sell property on which there are incumbrances, it is advisable to have an understanding, whether he shall charge a commission on the gross or net amount of the sale; for, in the absence of an agreement, it is probable he will be legally justified in charging his commission on the whole amount, including the incumbrances.

A broker will not be entitled to a commission where he has been guilty of such gross negligence, or unskilfulness in conducting the business, as to render what he has done altogether useless to his principal, or actually hurtful to him; nor for business done after notice that his authority has been revoked. A factor or broker, some writers assert, will likewise cease to be entitled to his commission, in the event of his becoming the executor or administrator of his principal.

230. What is the legal definition of a FACTOR?

A factor, or commission merchant, is an agent employed to sell goods consigned, or delivered him, by or for his principal, for a commission. A factor may buy and sell in his own name, as well as in the name of his principal. He is distinguished from a broker by the fact, that he has possession of the goods; and when the latter has possession of what he is employed to sell, or is empowered to obtain

possession of what he buys, he is in these cases properly a factor.

Thus, a note broker who has possession of the notes he offers to sell on discount, or a stock broker who has the certificates of stock delivered into his possession, is actually what the law calls a factor, and has a lien on the property held by him for his charges and commissions.

231. What is the power of a factor to bind his principal within the scope of his employment?

A known factor can bind a principal by all purchases or sales as factor, whether he has ever been employed before by the same principal in the same direction or not, and such power cannot be limited by private instructions with which persons dealing with the factor are not acquainted. "Whenever it is proved that A is agent of B, whatever A does, or says, or writes within the scope of his general authority at the time of making the contract, binds B." A principal is bound by the concealment of any material fact on the part of his general agent as well as by his open declarations and admissions. If a cargo of goods be consigned to a commission merchant with instructions to make an insurance thereon, and he conceal any material fact, the underwriters will be discharged; and if a factor sell goods of one kind or quality, and represent them to be of another, the merchant will be liable for the consequences of such fraudulent act, although there has been no fraud on his part. A payment made to a factor will bind the principal, unless the latter has given the debtor an express notice not to pay him. "Let a man take heed what factor he makes," is the caution of an old law writer.

232. What is the first and great duty of a factor, or commission merchant?