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set-off on the part of a purchaser.* If the factor, in a case duly authorized, sells on credit, and takes a negotiable note, payable to himself, the note is taken in trust for his principal, and subject to his order; and if the purchaser should become insolvent before the day of payment, the circumstance of the factor having taken the note in his own name, would not render him personally responsible to his principal.1" Even if the factor should guaranty the sale, and undertake to pay if the purchaser failed, or should sell without disclosing his principal, the note taken by him as factor would still belong to the principal, and he might waive the guaranty, and claim possession of the note, or give notice to the purchaser not to pay it to the factor. In such a case, if the factor should fail, the note would not pass to his assignees, to the prejudice of his principal; and if the assignees should receive payment from the vendee, they would be responsible to the principal; for the debt was not in law due to them, but to the principal, and did not pass under the assignment." The general doctrine is, that where the principal can trace his property into the hands of an agent or factor, he may follow either the identical article or its proceeds, into the possession of the factor, or of his legal representatives or assignees, unless they should have paid away the same in their representative *624 character, before notice of the claim of *the principal.11 The same rule applies to the case of a banker, who fails, possessed of his customer's property. If it

* Guy v. Oakley, 13 Johns. Rep. 332.

b Messier v. Amery, I Yeates' Rep. 540. Goodenow v. Tyler, 7 Mass. Rep. 36. Scott v. Surman, Hilles' Rep. 400.

« Godfrey v. Furzo, 3 P. Wms. Rep. 185. Ex parte Dumas, 1 Atk. Rep. 234. Tooke v. HolL'ngsworth, 5 Term Rep. 226. Garrett v. Cullum, cited in Scott v. Surman, Willes' Rep. 405, and also by Chatabre, J., in 3 Bot. fPull 490. Kip v. Bank of N. Y., 10 Johns. Rep. 53. Thompson V. Perkins, 3 Mason's Rep. 232.

a Veil v. Mitchel, 4 Wash. Cir. Rep. 105. Taylor v. Plumer, 3 Mendv $ Selw. 562.

be distinguishable from his own, it does not pass to his creditors, but may be reclaimed by the true owner, subject to the liens of the banker upon it.*

Though payment to a factor. for goods sold by him be valid, the principal may control the collection, and sue for the price in his own name, or for damages for nonperformance of the contract: and it is immaterial whether the agent was an auctioneer or common factor.b

There are some cases in which a factor sells on credit at his own risk. When he acts under a del credere commission, for an additional premium, he becomes liable to his principal when the purchase money falls due; and according to the doctrine in some of the cases, he is substituted for the purchaser, and is bound to pay, not conditionally, but absolutely, and in the first instance. The principal may call on him without first looking to the actual vendee. This is the language of the case of Grove v. Dubois," and it seems to have been adopted and followed in Leverick v. Meigs ;d and yet there is some difficulty and want of precision in the cases on the subject. It is said, that a factor under a del credere commission, is a guarantor of the sale, and that the notes he takes from the purchaser belong to his principal, equally as if he had only guaranteed them.* If he sells under a del credere commission, he is to be considered, as between himself and the vendee, as the sole owner of the goods; and yet he is considered only as a surety/ In

* Walker v. Burnell, Doug. Rep. 303. Bryson v. Wylie, 1 Bos. Pull. 83. Bolton v. Puller, Ibid. 539. In the case of Sargeant, 1 Rose's Rep. 153. Parke v. Ellison, 1 East's Rep. 544. 3 Mason's Rep. 242.

b Girard v. Taggart, 5 Serg. <J- Rawle, 19.

» 1 Term Rep. 112.

* 1 Cotaen's Rep. 645.

« But if he takes depreciated paper in payment, he must account for the full value in specie. Dunnell v. Mason, 1 Story's Rep. 543.

t Chambre, J., 3 Bos. $ Pull. 489. Thompson v. Perkins, 3 Mason's Rep. 232. A del credere factor or agent may sell in his own name. Thia is according to a custom in the London corn market. Johnson v. Ellis, II Adol. # Ellis, 549.

some late cases in the C. B., in England,» *the doctrine of the case of Gro»e v. Dubois was much questioned and it was considered to be a »exata qucestio, whether a del credere commission was a contract of guaranty merely on default of the vendee, or one altogether distinct from it, and not requiring a previous resort to the purchaser.b

Though a factor may sell and bind his principal, he cannot pledge the goods as a security for his own debtnot even though there be the formality of a bill of parcels and a receipt. The principal may recover the goods of the pawnee; and his ignorance that the factor held the goods in the character of factor, is no excuse. The principal is not even obliged to tender to the pawnee the balance due from the principal to the factor: for the lien which the factor might have had for such balance is personal and cannot be transferred by his tortious act, in pledging the goods for his own debt. Though the factor should barter the goods of his principal, yet no property

* Gall v. Comber, 7 Taunt. Rep. 558. Peel v. Northcote, Ibid. 478.

b The liability of a factor to bis principal for the proceeds of sales made by him under a del credere commission, is not affected by the statute of frauds; for the undertaking is original, and not collateral. Swan v. Nesmith, 7 Pink. Rep. 230. Wolff v. Koppel, 5 HOI N. Y. Rep. 458. The correct legal import of a del credere engagement, says Mr. Bell, is an engagement to be answerable, as if the person so binding himself was the proper debtor. 1 Bell's Com. 378. But the final settlement ef the question in the English courts is otherwise, and the doctrine of the case of Grove v. Dubois, may be considered as overruled. It was held, in Morris v. Cleasby, (4 Maule <J- Selw. 566,) that the character of a broker, acting under a del credere commission was that of a surety, for the solvency of the party with whom his principal deals through his agency. He becomes a guarantor of the price of the goods sold, and has an additional per centage for his responsibility. This was the opinion of Mr. Justice Story, in the case of Thompson v. Perkins, 3 Mason's Rep. 236, and confirmed in his Commentaries on Agency, 2d edit. see. 215. In Wolff v. Koppel, 2 Denio R. 368, this point was discussed and much considered in the New York Court of Errors; the conclusion was that the contract of a factor to account for the amount of sales under a del credere commission was not within the statute of frauds, and did not require to be in writing, as his en gagement was not absolute, but as a guarantor.

passes by that act, any more than in the case of pledging them, and the owner may sue the innocent purchaser in trover.* The doctrine that a factor cannot pledge, is sustained so strictly, that it is admitted he cannot do it by endorsement and delivery of the bill of lading, any more than by delivery of the goods themselves.1" To pledge the goods of the principal, is beyond the scope of the factor's power; and every *attempt to 626* do it under colour of a sale is tortious and void. If the pawnee will call for the letter of advice, or make due inquiry as to the source from whence the goods came, he can discover (say the cases) that the possessor held the goods as factor, and not as vendee; and he is bound to know, at his peril, the extent of the factor's power.c There may be a question, in some instances, whether the res gesta amounted to a sale on the part of the factor, or was a mere deposit or pledge as collateral security for his debt. But when it appears that the goods were really pledged, it is settled that it is an act beyond the authority of the factor, and the principal may look to the pawnee. There is an exception to the rule in the case of negotiable paper, for there possession and property go together, and carry with them a disposing power. A factor may pledge the negotiable paper of his principal as a security for his own debt, and it will bind the principal, unless he can charge the party with notice of the fraud, or of want of title in the agent. '1

» Guerreiro v. Peile, 3 Barnw. <$. Aid. 616. Rodriguez v. Hefferman, 5 Johnson's Ch. Rep. 429.

» Martini v. Coles, 1 Maule $ Selw. 140. Shipley v. Kymer, Ibid. 484. Graham v. Dyster, 6 Ibid. 1.

'Patterson v. Tash, 2 Str. Rep. 1178. Daubigny v. Duval, 5 Term Rep. 604. De Bouchout v. Goldsmid, 5 Vesey, 211. M'Combie v. Davies, 7 East's Rep. 5. Martini v. Coles, 1 Maule $ Selw. 140. Fielding v. Kymer, 2 Brod. $ Bing. 639. Kindar v. Shaw, 2 Mass. Rep. 398. Van Amringo v. Peabody, 1 Mason's Rep. 440. Bowie v. Napier, 1 MCord's Rep. 1.

a Collins S. Martin, 1 Bos. $ Pull. 648. Treuttel v. Barandou, 8 Taunt.

But though the factor cannot pledge the goods of Iris principal as his own, he may deliver them to a third person for his own security, with notice of his lien, and as his agent, to keep possession for him. Such a change of the lien does not divest the factor of his right, for it is, in effect, a continuance of the factor's possession.* So, if a factor, having goods consigned to him for sale, *627 should put them *into the hands of an auctioneer, or commission merchant connected with the auctioneer in business, to be sold, the auctioneer may safely make an advance on the goods for purposes connected with the sale, and as part payment in advance, or in anticipation of the sale, according to the ordinary usage in such cases.b But if the goods be put into the hands of an auctioneer to sell, and, instead of advancing money upon them in immediate reference to the sale according to usage, the auctioneer, should become a pawnbroker, and advance money on the goods by way of loan, and in the character of pawnor instead of seller, he has no lien on the goods. It may be difficult, perhaps, to discriminate in all cases between the two characters. It will be a matter of evidence, and of fact, under the circnmstances. The distinction was declared in Martini v. Coles,0 and it was observed in that case, that it would have been as well as if the law had been, that where it was equivocal whether the party acted as principal or

Rep. 100. Goldsmyd v. Gaden, in chancery, and cited in Collins S. Martin. Trover will lie by the principal against the agent, when the latter converts the property to his own use, or disposes of it contrary to bis instructions. M'Morris v. Simpson, 21 Wendell, 610.

» M'Combie v. Davies, 7 East's Rep. 5. Urquhart v. M'lver, 4 Johns. Rep. 103.

b Lausatt v. Lippincott, 6 Serg. d- Rawle, 386. If goods be consigned to a commission merchant or factor for sale at a limited price, and he makes advances on them, and they cannot be sold for that price, he may, on reasonable notice to his principal, at a fair market, sell them below that price for his indemnity. Frothingham v. Evertson, 12 N. H. Rep. 239.

< 1 Maule $ Selw. 140.

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