■ t i! ii iii i i 
 

 
 UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW 
 LIBRARY
 
 THE 
 
 NEW FACTORS ACT 
 
 With an Introductory Sketeh of the Origin and Growth of the Statutory Law 
 
 as affecting Merchants, Bankers and others in their dealings 
 
 with Mercantile Agents. 
 
 WITH AN APPENDIX OF THE STATUTES. 
 
 BY 
 
 ARTHUR BEILBY PEARSON-GEE, B.A., 
 
 Ml 
 
 Of the Inner Temple, Barrister- at- Law, 
 
 joint editor op " benjamin on sale," and joint author of " the factors acts, 
 
 1823 to 1877." 
 
 LONDON : 
 
 WILDY AND SONS, 
 LINCOLN'S INN ARCHWAY, W.C., 
 
 MANCHESTER : MEREDITH, RAY & LITTLER. 
 1890
 
 pJI?5"-5 
 
 LONDON : 
 C. F. EOWOETH, GEEAT NEW ETEEET, FETTEE LANE, E.C.
 
 TABLE OF CONTENTS. 
 
 — ♦ — 
 
 PAGE 
 
 I. Introductory 1 
 
 (i.) Factors Act, 1823 9 
 
 (ii.) Factors Act, 1825 9 
 
 (iii.) Factors Act, 1842 12 
 
 (iv.) Factors Act, 1877 16 
 
 II. The Factors Aot, 1889 19 
 
 III. Appendix No. 1 : 
 
 Law of France and Germany 73 
 
 IV. Appendix No. 2 : 
 
 Larceny Act, 1861 75 
 
 V. Appendix No. 3 : 
 
 Text of the Factors Acts, 1823—1877 78 
 
 VI. Index 91 
 
 749170
 
 THE NEW FACTOES ACT. 
 
 L— INTEODUCTORY. 
 
 The consolidation in simple and comprehensible form of 
 the law hitherto dispersed throughout the several statutes 
 known as the Factors Acts, and the numerous judicial 
 decisions upon the construction of those enactments, is a 
 benefit alike to the mercantile classes and to the legal 
 profession. The new Factors Act, which will come into 
 operation upon the 1st of January, 1890, is intituled " An 
 Act to amend and consolidate the Factors Acts." It will 
 be found to substantially confirm, but at the same time in 
 some not unimportant respects to amend, the previously- 
 existing law, the condition of which must, therefore, 
 form the subject of some preliminary inquiry. 
 
 The law upon this subject was formulated in the 
 series of four Factors Acts passed in the years 1823, 
 1825, 1842, and 1877 respectively (a) ; and was defined 
 and illustrated in a number of judicial decisions given 
 in cases arising under those statutes. The first Factors 
 Act (4 Greo. IV. c. 83) was, as we shall presently show, 
 the outcome of a prolonged struggle between the Par- 
 liamentary representatives of the commercial classes and 
 the legal profession ; as a consequence of which it was 
 merely tentative in character, and had a very narrow 
 scope ; while the three later enactments (6 Geo. IV. 
 c. 94; 5 & 6 Vict. c. 39; and 40 & 41 Vict. c. 39), 
 
 (a) The text of these statutes, now repealed, is given in Appendix 
 No. 3, post, pp. 78 et seq. 
 
 P. IS
 
 2 THE NEW FACTORS ACT. 
 
 although wider in scope and progressive in applica- 
 tion, were so hurriedly passed, in order to relax the 
 strictness of recent judicial interpretation, or to supply 
 some casus omissus in the earlier Acts, that they failed 
 to establish the law on any clear or comprehensive basis. 
 Hence the interpretation of these statutes often involved 
 great difficulty and labour, and many of the reported 
 judgments dealing with this branch of the law are master- 
 pieces of logical analysis and luminous exposition (a). 
 
 Again, the earlier legislation was marked by two con- 
 spicuous blemishes. In the first place, its scope was not 
 precisely defined, so that it was left for judicial interpre- 
 tation to decide what class or classes of persons were 
 intended to be within its operation, and a large body of 
 case-law was wholly due to this absence of statutory defini- 
 tion. Secondly, the three earliest enactments were ex- 
 pressed in language so loose and ambiguous that judicial 
 interpretation was again needed to determine whether or 
 not the same class of persons was within the contempla- 
 tion of the successive statutes, and another considerable 
 body of case-law was the result. 
 
 The aim of the new Act is to remedy these defects in 
 the earlier legislation. A preliminary section contains a 
 series of definitions, which serve to mark out with some 
 precision the scope and subject-matter of the statute ; and 
 in the process of consolidating within a moderate compass 
 the provisions of the previous Acts the draftsman has 
 substituted for the former prolixity or ambiguity of 
 expression a terse and uniform phraseology. 
 
 We propose to inquire somewhat in detail into the pro- 
 visions of the new Factors Act, and to preface our inquiry 
 
 (a) We may cite in particular, as perhaps the best-known examples, the 
 judgment of Mr. Justice Willes in Fuvntcs v. Montis, and of Lord Black- 
 burn in Cole v. North Western Banl:.
 
 INTRODUCTORY. 6 
 
 with a brief sketch of the origin and growth of the statutory 
 law relating to factors. We believe that some acquaint- 
 ance with the historical side of the subject is a necessary 
 pre-requisite for a comprehension of the existing rules of 
 law, and venture to think that the retrospect may possess 
 some special interest at the present time. 
 
 In the origin of the Factors Acts we have a remarkable 
 illustration of the authority of precedent, or what Bent- 
 ham irreverently termed " judge-made law," in English 
 jurisprudence. It has been said that " a precedent em- 
 balms a principle"; in English law it sometimes creates 
 one. A judgment at nisi prius, delivered on the spur of 
 the moment, and amid the hurry of judicial business, 
 imperfectly or even inaccurately reported (for law report- 
 ing a century and a-half ago was not an exact science), 
 may be the source whence the current of legal decisions 
 "broadens as it flows," until legislative interference alone 
 can remedy the resulting evils. 
 
 In the year 1743, Chief Justice Lee, sitting at Guild- 
 hall, decided the case of Paterson v. Task. The verbatim 
 report of his judgment, as given in Strange (b), is as 
 follows : " That though a factor has power to sell, and 
 thereby bind his principal, yet he cannot bind or affect 
 the property of the goods by pledging them as a security 
 for his own debt, though there is the formality of a bill of 
 parcels and a receipt. And the jury found accordingly." 
 This decision, although its authority is open to serious 
 doubt (c), was accepted without dispute as establishing the 
 
 (b) 2 Strange, 1178. 
 
 (r) There are strong reasons for maintaining - that the report of PaU rson 
 v. Task -was erroneous, and that it was in fact no authority for the rule 
 •which it was assumed to have laid down. The words in the reported 
 judgment, "though there is the formality of a bill of parcels and a 
 receipt," point to the probability of the case being one of collusion, or, 
 at any rate, one in which the pledgee knew that the person he was dealing 
 
 B 2
 
 4 THE NEW FACTORS ACT. 
 
 principle that at common law a factor has no power to 
 pledge the goods of his principal, so that the latter can 
 recover them even from an innocent pledgee who acted in 
 ignorance of the real character of the factor. We are 
 surprised to discover that so important a decision remained 
 unnoticed for half a century, and that no reference is 
 made to it in contemporary text books or reports ; bnt in 
 1794 {d) we find the rule in Paterson v. Task recognized 
 and acted upon ; and although many eminent judges, 
 including Gibbs, L. C. J., Lord Eldon, Lord Kenyon, 
 and Lord Ellenborough, expressed their disapproval of the 
 rule — Lord Eldon, indeed, on one occasion, going so far as 
 to disregard it (e) — its authority by the beginning of the 
 present century was firmly established. Moreover, the 
 principle, in spite of strenuous efforts to engraft excejitions 
 upon it, was extended from the original case of a factor 
 pledging the actual goods of his principal, to that of a 
 pledge of a bill of lading or of other indicia of property (/), 
 the extreme limit of its application being reached in cases 
 where the factor had applied the advances made to him on 
 
 "with was a factor, for otherwise there was no occasion for the formalities 
 referred to. The parties had in fact endeavoured to effect a pledge under 
 colour of a sale. If this be the correct view of the decision, it is clear 
 that Paterson v. Task was no authority for the subsequent cases, in all of 
 which the pledgee acted honestly and without notice that the borrower 
 was a factor. No instance can be found earlier than Paterson v. Task 
 where the title of an innocent pledgee was impeached. This view of 
 Paterson v. Task was very ably maintained by Mr. Freshfield, who repre- 
 sented the petitioning bankers and merchants before the Select Com- 
 mittee of the House of Commons, in 1823. Through the courtesy of Mr. 
 Justice Kekewich the present writer has had an opportunity of perusing 
 a copy of the address delivered by Mr. Freshfield before the Committee. 
 It may be mentioned that Gibbs, L. C. J., stated, shortly before his 
 death, that Paterson v. Task was misreported, but unfortunately assigned 
 no reason for that opinion. 
 
 (d) In Daubigny v. Duval, 5 T. R. 604. 
 
 (e) In PuUeney v. Keymer, 3 Esp. 182 (in 1800). 
 (/) Xewsom v. Thornton, 6 East, 17 (in 1805).
 
 INTRODUCTORY. 5 
 
 the security of the pledge, not to his own purposes, hut to 
 the specific ohject of taking up hills of exchange drawn 
 upon hira by his principal against the goods consigned, or 
 of paving the duties, freight, or other charges in con- 
 nection therewith (</). It would seem, however, that the 
 ruling in Paterson v. Task, and the series of common law 
 decisions which were based upon its authority, at first 
 attracted hut little notice among commercial men. This 
 was doubtless due to the peculiar circumstances of the 
 time. The import trade of Great Britain had been 
 crippled by the long and costly wars in which she was 
 engaged at the close of the last and the opening of the 
 present century, and it was not until after the resumption 
 of peace in 1815, with the rapid growth of commerce and 
 expansion of credit which at once ensued, that the com- 
 mercial classes awoke to the evils resulting from the 
 existing condition of the law. In 1823 an agitation was 
 set on foot by London merchants, bankers, and brokers, 
 with the view of obtaining an immediate alteration of the 
 law, and petitions were presented to Parliament with that 
 object. A Committee of the House of Commons was 
 appointed to investigate into the law and practice of trade 
 on the subject both at home and abroad ; a great number 
 of witnesses were examined, including many of the leading 
 London merchants, and most of the British vice-consuls 
 and commercial representatives on the continent ; and the 
 
 (g) Graham v. Dyster (1817), G M. & S. 1. The most important 
 decisions on the factor's power to pledge, after Taterson v. Tash, and 
 before the passing of the first Factors Act in 1823, are : Daubigny v. 
 Duval, 5 T. R. 004 (in 1794) ; Pulteney v. Keymer, 3 Esp. 182 (in 1800) ; 
 M'Combie v. Davis, 7 East, 5 (in 1805) ; Nticsom v. 'Thornton, 6 East, 17 
 (in 1805) ; Martini v. Coles, 1 M. & S. 140 (in 1813) ; Shiplay v. Keymer 
 ibid. 484 (in 1813) ; Solly v. Eathbonc, 2 M. & S. 248 (in 1814) ; Graham 
 v. Dyster, G M. & S. 1 (in 1817) ; Boyson v. Coirs, ibid. 14 (in 1817) ; 
 Barton v. Williams, 5 B. & A. 395 (in 1822).
 
 6 THE NEW FACTORS ACT. 
 
 Committee issued a report strongly urging upon the House 
 the necessity, in the protection of commerce, of an immediate 
 change in the law. This course was strenuously opposed 
 by the legal members of the House, led by Sir James 
 Scarlett (//). It is beyond the scope of our present inquiry 
 to discuss the arguments adduced for and against the policy 
 of the change («'). We will only remark that from the 
 point of view of commercial expediency the earlier Factors 
 Acts worked a necessary change in the common law. 
 The rule that a factor cannot pledge the goods of his 
 principal was adapted to early times, when merchandise 
 was generally sold in market overt, and the honest pur- 
 chaser was protected by the rules of the common law, 
 with reference to sales made in market overt. Little credit 
 was then given, and merchants were unable to trade beyond 
 their capital, and seldom required to pledge their stock- 
 in-trade. But the rapid growth of modern commerce has 
 brought with it a vast expansion of credit, and the neces- 
 sity for fresh facilities in obtaining borrowed capital. 
 Market overt no longer affords adequate protection, be- 
 cause little of the merchandise that is now brought to sale 
 is sold in market overt, and it seems just that the pur- 
 chaser or pledgee should have the same protection against 
 the owner who permits another to deal with his property as 
 if it were his own, as was afforded him by market overt (k). 
 Bankers and brokers are called upon to make advances 
 upon the security of goods or of documents of title, which 
 
 (h) Parliamentary Papers, Vol. IV. for the year 1823 ; Hansard's 
 Debates, Vol. IX. 211, 256. 
 
 (i) The arguments are summarised in a note to the case of Blandy v. 
 Allan, in Danson & Lloyd's Reports, pp. 29 et seq. 
 
 (J;) The Legislature, however, as will appear in the sequel, has 
 never extended the principle of "ostensible ownership" to this 
 point, although each of the Factors Acts marks an advance in this 
 direction.
 
 INTRODUCTORY. 7 
 
 are taken as representing goods, under circumstances which 
 may often render it very difficult, if not impossible, for 
 them to satisfy themselves beforehand that the customer 
 is the real owner of the securities he offers ; and the 
 difficulty is increased by the fact that factors are accus- 
 tomed to carry on business as merchants on their own 
 account. Further, although the old common law rule no 
 doubt protected the foreign consignor or owner against 
 fraudulent dealings by his factor, against which the home- 
 merchant is doubtless in a better position to protect him- 
 self, it may be fairly argued, on the other side, that the 
 change of law iuvolved in the Factors Acts conferred an 
 actual benefit on the foreign principal, by enabling his 
 factor to pledge the goods for advances wherewith to meet 
 the principal's drafts, and so save him from a forced sale 
 of the goods, when the market was unfavourable (/) . 
 
 Let us now pass from considerations of policy to those 
 of law. The rule in Paterson v. Tosh was supported, on 
 legal grounds, as being only a particular application of 
 the doctrine of the English common law, that one person 
 can give to another no better title to goods than he 
 himself possesses. This rule was apparently framed upon 
 that of the civil law — nemo plus juris ad. alium tran&ferre 
 potest quam Ipso haberet (m) — which we find engrafted on 
 most of the old legal codes of Europe existing before the 
 Code Napoleon (») . But the ride was not an inflexible 
 one, and yielded to exceptions, the best known of which 
 
 (l) The arguments in favour of the change are clearly put by Eest, 
 C. J., in Williams v. Barton, 3 Bing. 145, from whose judgment the fore- 
 going observations are mainly taken. 
 
 (in) The Digest absolutely prohibits pledging by an agent. God. lib. 8, 
 tit. 16 ; Dig. lib. 20, tit. 3. 
 
 («) All the old text writers in Holland and the maritime states of Italy 
 adopt the rule of the civil law. And the same rule was adopted in France, 
 in Scotland, and in America. The authorities are given in Bell's Com- 
 mentaries on the Law of Scotland, Vol. I. p. 520.
 
 O THE NEW FACTORS ACT. 
 
 is a sale in market overt. It also gave place to other 
 considerations arising out of the relationship of principal 
 and agent, and the nature of the particular authority 
 conferred upon the person who is in possession of the 
 property. We refer to the doctrine of estoppel, or " hold- 
 ing out," by which when a person authorizes another to 
 assume the apparent right of disposing of property in the 
 usual course of his employment, it is presumed that the 
 apparent authority is real, and the owner is estopped from 
 asserting the contrary. But the implied authority ex- 
 tending only to the usual course of employment, as soon 
 as it was decided that a pledge was beyond the scope of 
 the factor's employment, the case of a pledge fell outside 
 the exception and under the general rule above stated. 
 When we turn from England to foreign countries, we 
 find that the rule laid down in Pater son v. Task was con- 
 trary to the law and policy of all the other commercial 
 nations of Europe. Although, as we have already said, 
 they originally adopted the rule of the civil law, they 
 afterwards, in the interests of commerce, replaced it in their 
 codes by the doctrine that "possession constitutes title" — 
 that possession is proof of property. And the Committee 
 of the House of Commons reported that this doctrine was 
 the " law of France, Portugal, Spain, Sardinia, Italy, 
 Austria, Holland, the Hanse Towns, Prussia, Denmark, 
 Sweden, and Russia" (and they might have added Scot- 
 land (0)), and they strongly urged upon Parliament its 
 adoption in this country. The Legislature, therefore, in 
 determining to alter the law, had two courses open to it : 
 either to recognize the doctrine that " possession con- 
 stitutes title" to the full extent to which it was recognized 
 on the Continent, by conferring a good title in every 
 
 (0) See Bell's Commentaries, Vol. I. p. 517 (7th ed.). The provisions 
 of the French and German codes will be found in Appendix No. 1, post, 
 p. 73.
 
 INTRODUCTORY. 9 
 
 case upon innocent persons dealing with persons in the 
 apparent ownership of goods as if they were the real 
 owners, or, by an extension of the doctrine of estoppel, to 
 limit the protection to the particular case of innocent persons 
 dealing with mercantile agents under similar circumstances. 
 The Legislature adopted the latter course, but in a very 
 tentative and cautious spirit, owing, we may presume, to 
 the legal opposition raised in the House, and the imme- 
 diate result was the first Factors Act (4 Geo. IY. c. 83). 
 
 This Act went a very little way. It altered the law as 
 to j)ledging only in the particular case of consignments by 
 sea. Under its provisions a consignee might acquire a 
 lien upon the goods consigned to him for advances made, 
 or securities given, to the consignor, and transfer the lien 
 by a pledge of the goods, or of the bill of lading. It thus 
 repealed the common law rule that a pledge was so wholly 
 tortious as not even to transfer the pledgor's lien. But 
 the consignee must have had no notice that the consignor 
 was not the actual owner. The Act fell far short of the 
 protection required, and was speedily followed by the 
 Factors Act, 1825 (6 Greo. IV. c. 94), the object of which, 
 as stated in the preamble, was to alter and amend the 
 earlier statute, and to make further provisions in relation 
 to the contracts and agreements therein mentioned. The 
 following is a brief summary of the provisions of the Act. 
 
 After confirming the protection given by the earlier 
 Act to consignees (p), it proceeded to extend the doc- 
 trine of estoppel, so as to give validity to a pledge made 
 by a factor who was clothed with ostensible ownership of 
 goods, by being " entrusted with and in possession of " a 
 
 (p) No case has ever arisen requiring a court of law to construe the 
 provisions relating to consignees, probably because they have been found 
 to work harmoniously with the practice of merchants. See per Lord 
 Blackburn in Mildred v. Masponv, 8 App. Cas. 885.
 
 10 THE NEW FACTORS ACT. 
 
 " document of title " to goods, as specified by the Act, the 
 pledge being made as security either for an advance or in 
 respect of a pre-existing debt, and, in the latter case, 
 being valid to the extent only of the factor's lien upon the 
 goods then enforceable ; or, in other words, effectual only 
 to transfer the factor's lien to the pledgee. But what is im- 
 portant to observe is, that so far, the Act required that the 
 pledgee should be ignorant of the factor's real character ; 
 so that its effect was not to repeal the " rule in Paferson 
 v. Task," and to confer directly upon a factor the right to 
 pledge, but only to protect such persons as dealt with an 
 agent clothed with the ostensible ownership of goods on 
 the assumption that he was the real owner. But then the 
 Act went a step forward, and provided that even when 
 the pledgee knew that the person he was dealing with was 
 a factor, the pledge should have the same effect as in the 
 case of a pledge made in respect of an antecedent debt — 
 viz., to transfer the factor's lien to the pledgee — and to this 
 extent only it trenched upon the rule laid down in Pater' 
 son- v. Task. The Act dealt also with the sale of goods 
 by a factor, but on this point only confirmed the common 
 law, as laid down in several then recent decisions, to the 
 effect that for a sale to be valid by the application of the 
 principle of estoppel, the agent who was clothed with the 
 ostensible ownership of the goods must be one who has an 
 implied authority to sell, either in fact or from the nature 
 and scope of his employment, and the purchaser must 
 have no notice of the agent's want of authority to sell (q) . 
 These decisions were, doubtless, present to the minds of 
 those who framed the Act ; and the fact of the statutory 
 law being confirmatory of the common law on this point is 
 important, as indicating the intention of the Legislature not 
 
 (7) Wilkinson v. King, 2 Camp. 335 (in 1809) ; Pickering v. Busk, 15 
 East, 38 (in 1812) ; Dyer v. Trarson, 3 B. & C. 38 (in 1824).
 
 INTRODUCTORY. 11 
 
 to extend the doctrine of estoppel, upon which, as we have 
 already remarked, the provisions of the Factors Acts were 
 based, beyond the particular class of factors or agents for 
 sale. The Legislature, unfortunately, failed to express 
 this intention in clear and consistent language. The class 
 of agents whom the Acts were intended to protect were 
 described in the Factors Act, 1823, as " persons intrusted 
 for the purpose of sale " ; in the Factors Act, 1825, as 
 " persons intrusted for the purpose of consignment or of 
 sale," " persons intrusted and in possession," " agents 
 intrusted," " factors or agents " ; and in the Factors Act, 
 1842, as " agents intrusted with the possession," and 
 " agents intrusted and possessed." Hence a very large 
 share of the litigation under the Factors Acts arose from 
 endeavours to extend the operation of the Acts either to 
 other classes of agents, who were intrusted with the pos- 
 session of goods, or of a document of title to goods, but 
 who were not agents for sale, as, e.g., wharfingers, ware- 
 housemen, carriers, forwarding agents, and the like ; or to 
 persons who were not in any sense agents — e.g., buyers and 
 sellers allowed to obtain or to remain in possession of docu- 
 ments of title to goods sold. These endeavours, however, 
 were all unsuccessful, because the judges in every case con- 
 strued the intention of the Legislature, however imperfectly 
 expressed, as strictly applying — in spite of the general ex- 
 pressions to be found here and there throughout the Acts — 
 to the particular case of a factor or agent to whose employ- 
 ment a power of sale was ordinarily incident; and the 
 Legislature manifested its acquiescence in this judicial 
 interpretation of the scope of the Acts, by not framing its 
 enactments so as to avoid the effect of these decisions (as 
 it had avoided the effect of others), except in the par- 
 ticular case of a buyer or seller allowed to remain in 
 possession of the documents of title to goods sold, to which
 
 12 THE NEW FACTORS ACT. 
 
 the principle of estoppel was expressly extended by the 
 Factors Act, 187 7. Ee verting to the Factors Act of 
 1825, we remark that it provided for the right of the 
 true owner to redeem his goods from the factor or his 
 trustee in bankruptcy, or the goods or their proceeds 
 from a purchaser or pledgee from the factor, subject to 
 certain conditions. It also contained penal clauses dealing 
 with the case of a factor fraudulently pledging the goods 
 of his principal, which have since been superseded by the 
 provisions of the Larceny Act («/). 
 
 The law remained on this footing until the year 1842. 
 It proved to be altogether insufficient as a protection 
 for merchants, who also found in the stringency with 
 which its provisions were construed by the Courts the 
 greatest difficulty iu availing themselves of the benefits 
 which it was intended to confer. The Legislature there- 
 fore again interfered, and the Factors Act, 1842 (5 & 6 
 Yict. c. 39), was passed with the object, as declared in the 
 preamble, of altering and amending the earlier Act, and 
 extending the provisions thereof, and of putting the law on 
 a clear and certain basis. The preamble also states that 
 the object of the Act is to place pledges made by known 
 agents upon the same footing upon which sales made by 
 them were placed by the Factors Act, 1825, which the Act 
 accordingly effects in its first section, thus repealing the 
 rule laid down in Paterson v. Task just a century earlier, 
 and acknowledging tardily, but unreservedly, the right of 
 a factor to pledge the goods of his principal. The safety 
 of those dealing with factors was thus assured, and the 
 only condition the Act imposed was that the advances 
 to the factor should be made bond fide and without 
 notice of the agent's want of authority ; the object of the 
 Legislature not being of course to enable a factor to deviate 
 from any special instructions of his principal, when such 
 [q) Sec Appendix No. 2, post.
 
 INTRODUCTORY. 13 
 
 instructions have been brought to the knowledge of those 
 dealing with him. The Act extended the principle of 
 estoppel to the case of a pledge made by a known agent 
 (i.e., a factor), who is "intrusted with the possession of 
 goods, or of the documents of title relating to them ;" thus, 
 by the way, extending to the possession of goods the same 
 protection which the Factors Act, 1825, confined to the 
 possession of a document of title. 
 
 And here it becomes necessary to refer to the con- 
 struction which the Courts placed upon the qualifying 
 words, " agent intrusted," in the earlier Factors Acts. 
 The Courts, as we already have had occasion to observe, 
 decided that the " agent " under the Acts must be one to 
 whose employment a power of sale was ordinarily incident, 
 I. e., a factor, or an agent whose employment corresponded 
 to that of a factor ; but they further decided that the agent 
 must have received possession of the goods in his capacity 
 as agent for sale, and either for the specific purpose of sale, 
 or for some object connected with the sale. Possession 
 per st was only presumptive evidence of intrustment, and 
 it was open to the owner of the goods to repel the pre- 
 sumption, and prove that there was no intrustment in fact. 
 
 A few decisions, selected before and after the passing of 
 the Factors Acts, will serve to illustrate the limiting sig- 
 nification which the Courts attached to the expressions 
 " intrusted " and " intrustment." So early as 1809, Lord 
 Ellenborough, at nisiprius, decided that when goods were 
 sent to a wharfinger to be warehoused, and the wharfinger 
 also carried on business as a factor, and sold the goods to 
 a purchaser, who bought them bond fide, and without notice 
 of the agent's want of authority to sell, the sale was 
 invalid, and the transaction a tortious conversion, under 
 which the purchaser could derive no title (r). Soon after 
 
 (■>•) Wilkinson v. King, 2 Camp. 335. These cases are set out and 
 considered in a Treatise on the earlier Factors Acts by the Author and 
 Mr. H. F. Bnvd, to vhiuh the reader is referred generally.
 
 14 THE NEW FACTORS ACT. 
 
 the passing of the two earlier Factors Acts the Courts held 
 that it was not the intention of the Legislature, by those 
 enactments, to alter the effect of this decision. For, in 
 1831, in the case of a wharfinger who was also a flour 
 factor, and who received flour from the owner in his capa- 
 city of wharfinger, and without any authority to sell, and 
 the defendant had purchased the flour without notice of 
 the seller's want of authority, it was decided that the pur- 
 chaser was not protected by the Factors Act, 1825, and 
 that the owner could maintain trover against him (s). A 
 further, but unsuccessful, endeavour was made in 1874 
 to bring the case now under consideration within the 
 operation of the Factors Act, 1842, where the agent 
 carried on business in a twofold character, as a warehouse- 
 man and broker, and had received goods in the former 
 capacity, which he afterwards pledged for an advance, but 
 the same decision was given under the later as under the 
 earlier Act (/). But the Courts went further. They de- 
 cided that the factor must have received possession of the 
 goods not only qua factor, but also for the purpose of sale, 
 or, at any rate, for some purpose connected therewith, 
 whether before or after its completion (u). The Factors 
 Act, 1842, contained a proviso to the effect that an agent 
 in possession should be taken to have been intrusted by 
 the owner unless the contrary appeared in evidence; and, as 
 was pointed out by eminent judges like Lord Blackburn 
 and Mr. Justice Willes (x) , the effect of this proviso was that 
 possession even by an agent belonging to the class of nier- 
 
 (s) Monk v. Whittenlury, 2 B. & Ad. 484. 
 
 (t) Colev. North Western Bank, L. It. 10 C. P. 354; affirming- 8. C, 
 L. R. 9 C. P. 470 ; and see City Bank v. Barrow, 5 App. Cas. 664. 
 
 (u) Jaulerry v. Britten, 5 Scott, 655 ; 4 Bing. N. C. 442 ; Baines v. 
 Swainson, 4 B. & S. 270 ; Viekers v. Hertz, L. R. 2 H. L. (Sc.) 113. 
 
 (./) In Colev. North Western Bank, L. R. 10 C. P. at p. 371 ; and in 
 Fuentes v. Montis, L. R. 3 C. P. at p. 281.
 
 INTKODUCTOBY. 15 
 
 oantile agents to which the operation of the Acts was 
 limited, and one whose ordinary business it is to sell goods, 
 only raised a prima facie presumption of intrustment. 
 Hence it resulted that a pledgee, and, apparently, a pur- 
 chaser from an agent so in possession, ran the risk of the 
 owner Lcing able to prove that the goods had been sent 
 to the factor, not for sale, but to be warehoused or for- 
 warded, or that they were in the factor's possession by 
 way of pledge or of loan. A striking illustration of the 
 hardship and risk entailed upon merchants by this inter- 
 pretation was given in the case of a person making ad- 
 vances to a factor whose authority had been secretly 
 revoked, it being decided that the revocation of authority 
 put an end to the factor's power to jiledge, on the ground 
 that, although in possession, he was no longer intrusted 
 with the goods (//) . This particular hardship was removed 
 by the Factors Act, 1877, but previous to the passing of 
 the present Factors Act, there was no absolute seciuity 
 for persons dealing with factors who were clothed with the 
 ostensible ownership of goods unless and until they had 
 satisfactory proof both of the capacity in which, and of 
 the purpose for which, the factor had received the goods 
 from his principal. We shall deal hereafter with the 
 effect of the present Factors Act in this connection. We 
 need not pause to further consider the provisions of the 
 Factors Act, 1842 ; it relaxed the stringency of judicial 
 interpretation in certain cases which had been ruled out- 
 side the operation and benefit of the earlier Acts, in par- 
 ticular amending the law with reference to the bona fide 
 exchange of securities made by a factor, and to the posses- 
 sion by a factor of "derivative" documents of title, subjects 
 to which we shall again refer when we come to consider in 
 
 (y) Fuentesv. Montis, L. E. 3 C. P. 2G8 (in 1868).
 
 16 THE NEW FACTORS ACT. 
 
 detail the corresponding provisions of the present Factors 
 Act. 
 
 The statutory law remained in this condition for thirty- 
 five years. In 1877 the Legislature again interfered by 
 an enactment (the 40 & 41 Vict. c. 39), the object of 
 which, as stated in its preamble, was to remove doubts 
 which had arisen with respect to the true meaning of 
 certain provisions of the earlier Factors Acts, and to 
 amend the same, for the better security of persons buying 
 or making advances on goods, or the documents of title to 
 goods, in the usual and ordinary course of mercantile 
 business. 
 
 It has been already noticed {ante, p. 11) that en- 
 deavours were made to bring the case of a seller or of a 
 buyer who was allowed to remain in or to obtain possession 
 of a document of title to goods sold, within the definition 
 of a " person intrusted " under the Factors Acts (s). In 
 each case the endeavour was unsuccessful, the Courts ad- 
 hering to the strict interpretation of the word " person " 
 as " agent," whereas the persons in question affected to deal 
 with the goods not as agents but as owners, and in their own 
 right. The singular anomaly thus existed, as was pointed 
 out by Mr. Benjamin in his Treatise on the Law of Sale (a), 
 that if a merchant buying goods and paying the price 
 received a transfer of the document of title, he would be 
 safe if his vendor was not owner but only assignor of the 
 warrant, and would not be safe if the vendor was owner, 
 because the price might remain unpaid to the assignor of 
 
 (z) As relating to a seller, the case was Johnson v. The Credit Lxjonnaxs Co. , 
 2 C. P. D. 224 (affirmed on appeal, 3 C. P. D. 32), decided in 1877, only 
 a few months before the passing of the Factors Act of that year ; and as 
 relating to a buyer, the cases of Jenkyns v. Osborne, 7 M. & G. 678 
 (in 1844) ; and Van Casteel v. Booker, 2 Ex. 691 (in 1848). 
 
 (a) Benj. on Sale (4th ed. by the Author and Mr. H. F. Boyd), 
 p. 831.
 
 INTRODUCTORY. 17 
 
 the warrant. This was the necessary result of the con- 
 flicting interpretations put on the dock warrant by the 
 Legislature and the Courts. The chief object of the 
 Factors Act, 1877, was to remove this anomaly. 
 
 After amending the law to which avo have already 
 referred, with respect to the secret revocation of a factor's 
 authority, the Act proceeds to extend the operation of the 
 earlier Acts, and the principle of estoppel upon which 
 they were based, to the cases in question, by, in effect, 
 enacting that a seller or a buyer in possession of a docu- 
 ment of title to goods sold should be able to make as valid 
 a sale or pledge as if he were an " agent " or " person 
 intrusted " by the other within the meaning of the Factors 
 Acts ; provided that the purchaser or pledgee had no notice 
 of the previous sale, and the first purchaser's rights there- 
 under, or of the original vendor's rights, as the case 
 might be. 
 
 Further, with the object of reconciling the statutory and 
 common law interpretation of warrants and other docu- 
 ments which have been treated by the Legislature and by 
 merchants as authorizing the holder to transfer the actual 
 possession of the goods which they represent, the Act pro- 
 vided that the negotiation of any " document of title," 
 for the definition of which we must apparently turn to the 
 earlier Acts, to a bond fide transferee for value (purchaser 
 or pledgee) should have the same effect for defeating the 
 vendor's lien or other rights, as the transfer of a bill of 
 lading had at common law for defeating the right of 
 stoppage in transitu. It thus extended to dock warrants, 
 delivery orders, &c, the principle laid down in the great 
 leading case of Lickbarrow v. Mason (b), as applicable to 
 bills of lading only. As, however, the present Factors 
 Act substantially re-enacts this provision of the Factors 
 
 (//) 1 Sm. L. C. (ed. 1887) 737.
 
 18 THE NEW FACTORS ACT. 
 
 Act, 1877, we propose to postpone any observations we 
 may have to offer upon this topic, until we come to con- 
 sider those provisions in detail. 
 
 The Factors Act, 1877, marked a fresh stage in the 
 history of legislation for the protection of persons dealing 
 with those who are clothed with the ostensible ownership 
 of property. Strictly speaking, it lay altogether outside 
 the scope of the earlier Factors Acts, because it went 
 beyond the class of commercial agents from which those 
 Acts received their name, and to which their operation was, 
 by the strictness of judicial interpretation, practically con- 
 fined ; but it must not be overlooked that its application 
 reached only to the particular class of persons indicated, 
 i.e., sellers and buyers in possession of a document of title 
 to goods sold. It protected merchants, bankers, and 
 others who bond fide made advances to or purchased goods 
 from such persons without notice of the circumstances 
 under which they were in possession of the indicia of 
 property ; it had no application either to classes of agents 
 other than factors or agents in the nature of factors, as, 
 e.g., warehousemen or wharfingers, or to factors or agents 
 for sale who were not "intrusted" and in possession of 
 a document of title for the purpose of sale or some object 
 connected therewith. Judicial decisions had ruled these 
 cases to be outside the operation and benefit of the Factors 
 Acts, and the Factors Act, 1877, did not annul, save in 
 the case of a secret revocation of a factor's authority, the 
 effect of any of those decisions. To this limited extent only 
 had the Legislature thought fit to recognize the doctrine 
 that " possession gives title," a doctrine which, as we have 
 already remarked, prevails among the commercial nations 
 of Europe, and which the committee of the House of 
 Commons appointed in 1823 so strongly urged upon 
 Parliament to adopt in this country.
 
 ( 19 ) 
 
 II.— THE FACTORS ACT, 1889. 
 
 II vying now reviewed the state of the law previous to tho 
 Factors Act, 1889, we propose to consider in detail the 
 provisions of that statute. 
 
 The Act is intituled " An Act to amend and consolidate 
 the Factors Acts." Its object, therefore, is two-fold, viz., 
 in part to alter, and in part to confirm the pre-existing 
 law. The Act does not, like the previous Factors Acts, 
 furnish an aid to its own interpretation by commencing 
 with a preamble setting forth the objects which the Legis- 
 lature had in view, but leaves us to determine in what 
 particulars and to what extent the law has been amended 
 from a consideration of the actual language employed, 
 wherein some difficulty may arise, from the fact that its 
 phraseology differs from that of tho previous Acts, and it 
 is not always clear whether a change of language was in- 
 tended to effect a change in the law, or was adopted merely 
 with a view to uniformity of expression. 
 
 The amending portions of the Act, however, appear to 
 be few, and not very important. Setting aside the substi- 
 tution of a mercantile agent having a prescribed authority 
 for the "agent intrusted" of the previous Acts (sect. 1, 
 sub-sect. 1), which seems to be a formal, and not a sub- 
 stantial, alteration of the law (post, pp. 22 et srq.), the 
 amendments, which will be considered in detail under the 
 respective sections of the Act, may be briefly summarized 
 as follows : — 
 
 1. An authority to pledge is placed upon the same 
 footing with an authority to sell. (Sect. 1, sub- 
 sect. 1.) 
 
 c2
 
 20 THE FACTORS ACT, 1889. 
 
 2. A liability may form a good consideration, whether 
 
 present or past, for a pledge. (Sect. 1, sub-sect. 5, 
 and sect. 4.) 
 
 3. The consideration for a sale, pledge, or other disposi- 
 
 tion under the Act is extended. (Sect. 5.) 
 
 4. The proviso previously existing as to notice in the 
 
 case of a pledge for an antecedent debt is repealed. 
 (Sect. 4.) 
 
 The Act itself is divided into four parts, the following 
 being a summary of its clauses : — 
 
 Part I. — Preliminary. 
 
 Definitions of mercantile agent, possession, goods, 
 documents of title, pledge, and person. (Sect. 1.) 
 pp. 21—36. 
 
 Part II. — Dispositions by Mercantile Agents. 
 
 Deals with a sale, pledge, or other disposition by a 
 mercantile agent in possession, with the consent of 
 the owner, of goods or of the documents of title to 
 goods (sect. 2, sub-sects. 1, 4) : pp. 36 — 40, 42. 
 
 Provides (1) for the secret revocation of the agent's 
 authority (sect. 2, sub-sect. 2) ; (2) for the agent's 
 possession of a " derivative" document of title (sect. 2 
 sub-sect. 3) ; (3) for the effect of a pledge of a 
 document of title (sect. 3) : pp. 40 — 42, 43. 
 
 Deals with a pledge made in respect of a pre-existing 
 debt or liability (sect. 4) : pp. 43 — 49. 
 
 Defines the consideration necessary for the validity of a 
 disposition of goods made in pursuance of the Act 
 (sect. 5) : pp. 49—54. 
 
 Deals (1) with the exchange of goods or documents held 
 in pledge (sect. 5) ; (2) with agreements made through 
 a clerk or other authorized person (sect. 6) ; (3) with 
 the lien of a consignee (sect. 7) : pp. 52—54, 54 — 56.
 
 THE FACTORS ACT, 1889. 21 
 
 Part III. — Dispositions by Sellers or Buyers of Goods. 
 Deals ( 1 ) with the case of a seller remaining iu possession 
 (sect. 8), or of a buyer obtaining possession (sect. 9), 
 of goods or documents, and the effect of the delivery 
 or transfer thereof in pursuance of a sale, pledge, or 
 other disposition ; (2) with the effect of a transfer of a 
 document of title on the original seller's lien or right 
 of stoppage in transitu (sect. 10) : pp. 56 — 69. 
 
 Part IV. — Supplemental. 
 
 Deals with the mode of transferring a document of 
 title (sect, 11) : p. 69. 
 
 Saves (1) the criminal and civil liability of an agent acting 
 contrary to his authority (sect. 12, sub-sect. 1) ; (2) the 
 right of the owner of goods to recover or redeem 
 them, or the proceeds of their sale, from the agent or 
 his trustee in bankruptcy, or from a pledgee or pur- 
 chaser from the agent (sect. 12, sub-sects. 2, 3) ; (3) the 
 common law powers of an agent (sect. 13) : pp. 69 — 72. 
 
 Eepeals the four earlier Factors Acts, saving existing 
 rights and liabilities (sect. 14) : p. 72. 
 
 Provides for the commencement, extent, and title of the 
 Act. (Sects. 15, 16, 17) : p. 72. 
 
 Preliminary. 
 
 1. For the purposes of this Act — 
 
 (1.) The expression "mercantile agent" shall 
 mean a mercantile agent having in the 
 customary course of his business as such 
 agent authority either to sell goods, or 
 to consign goods for the purpose of sale, 
 or to buy goods, or to raise money on 
 the security of goods. 
 
 The Act commences with a definition of the class of agent 
 to which its application (ss. 2 — 7) is limited. The definition
 
 22 THE FACTORS ACT, 1889. 
 
 is important, not only as indicating the scope of the Act, bnt 
 also as effecting' an alteration in the law. The first question 
 to present itself in any case arising under the Factors Acts is 
 this : is the person dealing with goods or documents of title 
 in his possession an agent within the meaning and intent of 
 the Factors Acts ? This is a question of law which depends 
 for its solution upon the construction to be put upon the lan- 
 guage of the Acts. Now, as we have already shown, the 
 earlier Factors Acts contained no definition whatever of the 
 particular class of persons to which they were intended to 
 apply. There was no uniformity in the description given 
 by the different Acts, nor even in different clauses of the same 
 Act. Sometimes the class was limited to " agents intrusted," 
 sometimes more widely described as "persons intrusted." 
 Thus we find the following (among other expressions), " a 
 person intrusted for the purpose of sale," " a person intrusted 
 with and in possession," "an agent intrusted," " a factor or 
 agent." The Courts, however, refused to adopt the wider 
 signification which, it was contended, attached to some as 
 compared with others of these expressions. They construed 
 the more general expressions with reference to the general 
 scope and object of the Acts as well as to the particular lan- 
 guage used, so as to limit their operation to one and the same 
 class of persons throughout all the Factors Acts, viz., a factor 
 or agent in the nature of a factor, intrusted with the posses- 
 sion of goods as such factor or agent, that is, for the purpose 
 of sale, or for some object connected with the sale («.). The 
 agent, therefore, must have received authority from his prin- 
 cipal, express or implied, to sell the goods, that is to say, he 
 must either have been intrusted with the goods for the pur- 
 pose of sale, or have been a person who is ordinarily intrusted 
 to sell such goods, and havo made the sale or pledge in the 
 ordinary course of his business, in pursuance of the authority 
 so conferred upon him. The language of the present Act 
 is altered. It no longer requires the agent to be " intrusted," 
 but substitutes for "the agent intrusted" of the previous 
 Acts, a mercantile agent having, in the customary course of 
 
 (a) These last words are inserted to include the decision in Baincs v. 
 Swainson, 4 B. & S. 270.
 
 THE PACTOES ACT, 1889. 23 
 
 his business (&) as such agent, authority to deal with goods in 
 one or other of the following ways : 
 
 ( 1 ) To sell goods ; 
 
 (2) To consign goods for tho purpose of sale ; 
 
 (3) To buy goods ; 
 
 (4) To raise money on tho security of goods. 
 
 "We have therefore to determine whether the Act by this 
 change of language has effected any corresponding change in 
 the law. "What was the object and effect of the previous 
 Factors Acts ? The Legislature did not intend by those statutes 
 to provide a remedy for those hardships which accrued to 
 innocent persons by dealing with persons in the apparent 
 ownership of goods as if they were the real owners, but only to 
 protect such persons in their dealings with agents of the 
 owners of goods — agents "intrusted and in possession." The 
 authority therefore given by the Factors Acts quoad third 
 persons was an authority superadded and accessory to the 
 ordinary authority given by a principal to his factor (c). The 
 Factors Acts required that the relation of principal and agent 
 should exist between the owner of the goods and the person 
 in possession of them. They also required that the agent 
 should be "intrusted" with the goods, and "intrustment," 
 owing to the judicial construction put upon that word, meant 
 something more than mere possession with the owner's privity 
 and consent. An agent was held to be " intrusted " only when 
 he had received possession of goods or documents of title, qud 
 agent — that is to say, in his capacity as agent for sale, or for 
 some purpose in connection with the sale. And the Factors 
 Act, 1842, contained a very important provision, the effect of 
 which, as expounded by very eminent judges (d), was to make 
 
 (b) An agent ■whose ordinary business "was not to sell, but who was 
 authorized to sell in the particular instance, was held to be an " agent 
 intrusted ' ' within the meaning of the previous Act, on the ground that 
 his employment corresponded to that of a factor pro hdc vice, and that it 
 was immaterial that it was an isolated instance of Ms employment : 
 Hajman v. Flewker, 13 C, B. N. S. 519. 
 
 (c) See per Willes, J., in Fuentcs v. Montis, L. E. 3 C. P. at p. 282 ; 
 affirming the dictum of Blackburn, J., in Baincs v. Swainson, 4 B. & S. 
 270. 
 
 (d) Lord Blackburn in Baincs v. Swainson, ubi supra; and Willes, J., in 
 Fuentes v. Montis, ubi supra.
 
 24 THE FACTORS ACT, 1889. 
 
 possession of the goods even by a mercantile agent, whose 
 ordinary business it is to sell, only prima facie evidence of 
 intrustment, leaving it open to the owner to rebut that pre- 
 sumption by showing the real nature of the transaction 
 between him and his agent. Thus, to take the case of an 
 agent whose general business it is to sell, being intrusted 
 with goods for a purpose other than that of sale, as, e.g., upon 
 a pledge for an advance with instructions not to sell, or upon 
 loan ; or, if he happens to carry on business as a warehouseman 
 as well as a factor, and goods are placed in his possession to 
 be warehoused ; in both these cases the agent would, primd, 
 facie, be in a position to deal with these goods as factor, and 
 yet, owing to the effect of the proviso to which we have 
 referred, the principal might repel the presumption of the 
 agent's enlarged authority under the Factors Acts, and the 
 persons dealing with the agent would lose the protection of 
 those statutes. 
 
 Let us now turn to the clause of the present Act now under 
 consideration. First of all, the Act applies only to agents (d). 
 The scope of the Act is not wider than that of the previous Acts. 
 The person who is to give a title as against the owner of the 
 goods must be an agent. If he has no right to the possession 
 of the goods as agent, the provisions of the Act do not apply 
 to him. 
 
 Secondly, the agent must be a mercantile agent — that is to 
 say, an agent in a mercantile transaction (e). 
 
 Thirdly, the mercantile agent must have been authorized by 
 his principal to deal with the goods in his possession in one of 
 the ways specified. In this respect, again, the scope of the 
 Act is not wider than the previous Acts, and the statutory 
 powers which it confers are superadded to the authority con- 
 ferred npon the agent by his principal, and to the powers result- 
 ing therefrom, which the agent can exercise at common law(y ). 
 But the Act does go beyond the previous Factors Acts in ex- 
 tending the nature of the authority which the agent must 
 
 (d) Sellers and buyers of goods remaining in possession thereof are 
 treated as agents for the purposes of the Act. 
 
 (c) Decided under the previous Factors Acts in Wood v. Rowcliffc, 6 
 Hare, 183. 
 
 (/) Tide the 13th section of the Act, post, p. 71.
 
 THE FACTORS ACT, 1889. 25 
 
 possess before lie can be invested with the statutory authority. 
 The earlier Acts required, as we havo seen, that the agent 
 should havo authority to sell, either express or implied. The 
 present Act provides that the agent should bo authorized 
 either to sell, and that expressly or impliedly (as in the case of 
 a consignor for the purpose of sale, or of a broker or agent to 
 buy goods, having possession of the goods bought), or to raise 
 money on the security of goods — i.e., to pledge — thus placing 
 an authority to pledge upon the same footing with an 
 authority to sell. The agent's authority may be expressly 
 conferred by the instructions of his principal, or may be 
 implied from the course of former dealings between the 
 same parties, or from the nature and scope of the agent's 
 business. Thus, a factor, or broker when in possession 
 of goods, has implied authority to sell or pledge them, 
 because the making of contracts for the sale or purchase 
 of goods, or the pledge of them (since 1842), is within the 
 scope of the usual employment of a factor or broker. 
 So, again, a consignor for the purpose of sale, or a con- 
 signee for sale, or a broker employed for the purchase of 
 goods, who is allowed to obtain possession of the goods 
 bought — a case to which we shall presently refer — has each 
 implied authority to sell or pledge the goods consigned to 
 him or intrusted to his possession. The important question is 
 as to the right of the owner of the goods to rebut the presump- 
 tion of authority which arises from the ordinary scope of the 
 agent's employment, by proof of the actual authority given, 
 and to show that the agent was not in fact authorized to deal 
 with the goods in any of the ways specified by this section of the 
 Act. This right was, as we have stated, expressly reserved to 
 the owner by the 4th section of the Factors Act, 1842, and 
 the object of the present section is to preserve the effect of that 
 provision, and of the judicial construction of the word "in- 
 trusted " under the previous Acts, by requiring that a mer- 
 cantile agent, to be within the meaning of the Act, must have 
 such an authority from his principal to deal with goods as is 
 prescribed by the section. "We conclude, therefore, that the 
 present Act has not, by its change of language, effected any 
 change in the law. The agent, although no longer " in-
 
 26 THE FACTORS ACT, 1889. 
 
 trusted " in name, must still bo "intrusted " in fact, because 
 the Act requires that he should not only be in possession with 
 the owner's privity and consent, but also in possession as a 
 mercantile agent having in the customary course of his business 
 as such agent, authority to sell or pledge the goods of which 
 he is in possession, which corresponds, with the extension of 
 authority to which we have already referred, to the " agent 
 intrusted" of the earlier Acts. It follows that mere posses- 
 sion of goods, or of documents of title by a mercantile agent, 
 even with the owner's consent, will still, as heretofore, only 
 create a presumption of authority to dispose of the goods, 
 which presumption the owner may rebut by proof of the 
 agent not being an agent within the meaning of this section 
 of the Act — that is to say, by proof that the actual authority 
 given was different from the authority proscribed, and that 
 the agent received possession of goods not for the purpose of 
 selling or pledging them, but for some other purpose. If 
 this view of the object and effect of this section be correct, 
 the Act has not altered the old law as laid down in JVilki?i- 
 son v. King, Monk v. Whittenbury, and Cole v. The North 
 Western Bank, cases to which we have already referred ante, 
 p. 13, where the agent carries on business in a twofold 
 character, e. g., as factor or commission agent, and as ware- 
 houseman or wharfinger, and having received possession of 
 goods from the owner in his latter capacity, sells or pledges 
 them in his former capacity as an agent for sale. It was 
 decided in these cases that the agent could not confer 
 a good title upon a purchaser or pledgee either at common 
 law or under the previous Factors Acts, which had not 
 altered the law in this respect, the ratio decidendi of the 
 cases arising under the Factors Acts being, that the agent 
 must have been "intrusted" with the goods as agent for 
 sale, that is to say, must have received possession of them 
 in that capacity, and for the purpose of sale. Now the 
 warehouseman or wharfinger, who also carries on business 
 as a factor, and who has received possession of goods for 
 the purpose of being warehoused, is not a mercantile agent 
 within the meaning of the Act, since he has not authority as 
 such warehouseman or wharfinger to sell or pledge the goods,
 
 THE FACTORS ACT, 1881). 27 
 
 and by selling- or pledging- them in tho course of Lis business 
 as factor, can confer no title upon a purchaser or pledgee. It 
 is, therefore, still necessary for the complcto security of per- 
 sons dealing with mercantile agents, that they should inquire 
 in what capacity, and for what purpose, the agent received 
 possession of goods, for if tho agent happens to carry on 
 business in a twofold character, and has received possession 
 of the goods in a capacity which gives him no authority to sell 
 or pledge them, or has received goods, not for the purpose of 
 selling or pledging them, but as bailee by way of loan, or for 
 the purpose of storing or forwarding them, a sale or pledge 
 of tho goods by the agent will not be protected by the Factors 
 Act. 
 
 Mercantile agents are divided into two principal classes (</), 
 
 {g) Mr. Justice Story enumerates six principal classes of mercantile 
 agents as well-known in commerce, and recognized in Courts of Justice. 
 They are auctioneers, factors, brokers, ship's-husbands, masters of ships, 
 and partners. An auctioneer comes within the statutory definition of a 
 mercantile agent, having, in the customary course of his business as such 
 agent, authority to sell g-oods ; but it is conceived that the provisions of 
 the Factors Act will not apply in his case. A pledge by an auctioneer would 
 be invalidated by reason of the proviso as to notice of tho agent's want of 
 authority (sect. 2, sub -sect. 1). Moreover, an auctioneer is a special 
 agent, authorized to sell particular goods in a prescribed mode, viz., by 
 public auction or sale, and the Factors Act is intended to apply to the 
 class of general agents who are authorized to do all acts connected with 
 a particular trade or business. It is sufficient to say of ship's -husbands, 
 and masters of ships, that they have not, under ordinary circumstances, 
 authority to sell or pledge the cargoes of which they have the control. In 
 case of extreme necessity the character of supercargo may be forced 
 upon the ship's-master, or he may, possibly, be appointed by the owner 
 supercargo, or consignee of the cargo. As supercargo, he is a quasi-iactov 
 who accompanies the cargo which he is employed to sell, but his acts as 
 supercargo must then be treated as distinct from his acts as master, and 
 as though he acted as a different person in each capacity. An interesting 
 epiestion may arise, whether a partner comes within the operation of 
 the Act. Every partner is, in contemplation of law, the general and 
 accredited agent of the partnership, and if the partnership is a com- 
 mercial one, each partner has implied authority to sell or pledge the 
 property of the firm. A partner, therefore, seems to fall within the 
 definition of a "mercantile agent," as given by the Act. The question 
 was never raised under the earlier Factors' Acts. Lord Justice Lindley, 
 (Treatise on Partnership, p. 140, ed. 1S88,) is of opinion that those Acts
 
 28 THE FACTORS ACT, 1889. 
 
 namely, factors who are intrusted with the possession as well 
 as the disposal of property, and brokers who are employed to 
 contract only, without being put into possession (h). "We 
 believe that among merchants the term " broker " is used 
 generally of both classes of agents, and that the term " factor " 
 is not in use except with a limited signification in certain 
 special trades, e. g., corn-factors and coal-factors (i). 
 
 A factor has been denned to be an agent employed to sell 
 goods or merchandise consigned or delivered to him by or for 
 his principal for a compensation commonly called factorage 
 or commission (&), or more briefly as "an agent intrusted 
 with the possession of goods for the purpose of sale " (I). 
 
 A factor has implied authority : — 
 
 1. To sell goods in his own name, and upon reasonable 
 
 credit (m). 
 
 2. To receive payment of the price either in cash or by 
 
 cheque («). 
 
 3. To sell at such time and at such price as he may think 
 
 best (o). 
 
 4. To warrant goods if that is the custom of the trade (p). 
 
 5. To insure goods (q). 
 
 6. To pledge goods (as conferred upon him by the Factors 
 
 Act, 1842). 
 
 neither extended nor abridged the common law powers of a partner to sell 
 or pledge the goods of the firm. They did not render valid any sale or 
 pledge by a partner of partnership goods which was not valid independently 
 of the Acts, on the principles of the common law. It is believed that the 
 present Act will not be found to have any greater effect than the earlier 
 legislation in extending a partner's common law powers, and it expressly 
 provides, by the thirteenth section, that it shall not have any effect in 
 abridging them. 
 
 (h) Smith's Mercantile Law (9th ed.), p. 106. 
 
 (i) It is curious to note that, except in the titles of the Acts, the word 
 " factor" occurs only once throughout the series of Factors Acts, namely, 
 in sect. 5 of the Factors Act, 1825. 
 
 (k) Story on Agency, § 33 ; Com. Dig. Merchant, B. 
 
 (/) Per Cotton, L. J., in Stevens v. Billcr, 25 Ch. D. at p. 37. 
 
 (»>) Ex parte Dixon, 4 Ch. D. 133 ; Scott v. Surnam, Willes, 400, 406. 
 
 («) Drinkivater v ■. Goodwin, Cowp. 251. 
 
 (o) Smart v. Sanders, 3 C. & B. 380. 
 
 (p) Pickering v. Busk, 15 East, 38, 45. 
 
 (q) Luccna v. Crawford, 2 B. & P. N. R. 209, per Lord Eldon.
 
 THE FACTORS ACT, 1889. 29 
 
 A factor is often termed a commission agent, or consignee for 
 sale, and the goods delivered to him for sale are called a con- 
 signment. A factor may also be the consignor of the goods, 
 including under that term both the foreign merchant shipping 
 goods to this country for sale, or the home agent forwarding 
 goods from a distance for that purpose, and the consigneo 
 here to whom goods are shipped or forwarded, not for sale, 
 but for the purpose of re-consignment for sale abroad. In 
 these cases the factor answers the statutory definition of a 
 mercantile agent, having authority to consign goods for the 
 purpose of sale. 
 
 A broker may be defined to be an agent employed among 
 merchants and others to make contracts between them, in 
 matters of trade, commerce and navigation for a commis- 
 sion, commonly called brokerage (>•). Brokers, as distin- 
 guished from factors, are not ordinarily intrusted with the 
 possession and control of the goods which they are employed 
 to sell or to buy ; so that the provisions of the Factors Act 
 (ss. 2 — 7), which relate only to mercantile agents in posses- 
 sion of goods or of documents of title to goods, will not apply 
 to them. But in practical business the character of broker 
 and factor is often combined ; brokers have possession of the 
 goods they are employed to sell, or are authorized to obtain 
 possession of the goods they are employed to buy. Moreover, 
 brokers are often capitalists who make advances on goods, 
 and have them transferred into their own names as security. 
 A broker under these circumstances is more than a mere 
 broker, and is strictly a factor, having equally with a factor 
 a lien for his commission. 
 
 The statutory definition of mercantile agent will include 
 both brokers who are employed to sell and to buy goods, and 
 the Act will protect dispositions made by them when in posses- 
 sion of goods or of the documents of title relating to the goods 
 which they have been employed to sell or to buy. So far as 
 relates to a broker for the purchase of goods, the Act only 
 confirms what was decided at common law so long ago as 
 1812, in Pickering v. Bushes). In that case the plaintiff, 
 
 (»•) See Story on Agency, § 28. 
 (s) 15 East, 38.
 
 30 THE FACTORS ACT, 1889. 
 
 the owner of goods, had purchased them through Swallow, who 
 pursued the public business of broker and an agent for sale, 
 and the goods were, at the plaintiff's desire, transferred into 
 Swallow's name. It was held that this proved that Swallow 
 had an implied authority to sell, and consequently that the 
 defendants were justified in buying of him and paying him 
 the price. The case was decided on the ground of an implied 
 authority, in fact, to sell, but Lord Ellenborough went further, 
 and said, "If a person authorizes another to assume the ap- 
 parent right of disposing of property in the ordinary course 
 of trade (/. e., in intrusting it to an agent whose customary 
 business is to sell), it must be presumed that the apparent 
 authority is the real authority. I cannot subscribe to the 
 doctrine that a broker's engagements are necessarily and in 
 all cases limited to his actual authority, the reality of which 
 is afterwards to be tried by the fact. It is clear that he may 
 bind his principal within the limits of the authority with which 
 he has been apparently clothed by his principal in respect of 
 the subject-matter, and there would be no safety in mercantile 
 matters if he could not." The Factors Act confirms the com- 
 mon law as laid down in Pickering v. Busk, by providing that 
 a broker who is authorized to sell or to buy goods, shall have, 
 when allowed by the owner to obtain possession of the goods, 
 and so to assume the apparent right of disposing of them, 
 implied authority to dispose of them in the ordinary course 
 of his business. 
 
 Lastly, the statutory definition includes a mercantile agent 
 who is authorized in the customary course of his business to 
 raise money on the security of goods. The previous Factors 
 Acts required that the agent should have been intrusted for 
 the purpose of sale, or of some object connected therewith ; 
 the present Act extends its operation to the case of a mer- 
 cantile agent who is authorized to pledge the goods of his 
 principal, and puts an authority to pledge upon the same 
 footing with an authority to sell. 
 
 There is a class of brokers who are employed to raise 
 money upon securities which are placed in their posses- 
 sion for that purpose. They act as intermediaries between 
 bankers and others advancing money and borrowers, and
 
 THE FACTOKS ACT, 1889. 31 
 
 are in the habit of lending money to their customers upon 
 the securities which are deposited -with them, and which they 
 then pledge with the bankers who advance them the money. 
 Independently of the Factors Act, brokers can make a valid 
 pledge of securities, such as bills of exchange or promissory 
 notes, which are negotiable at common law, and of instru- 
 ments which are negotiable by the custom of trade, such as 
 bonds payable to bearer, and bankers are perfectly safe in 
 dealing with them, provided they make the advances in good 
 faith and without notice of the broker's want of authority (t). 
 The effect of the Act appears to be to extend the same pro- 
 tection to sales and " other dispositions" made by factors and 
 brokers in possession of goods or of documents of title to 
 goods, for the purpose of pledging them, which the previous 
 Factors Acts gave to pledges made by those agents when 
 " intrusted" with goods or documents of title for the purpose 
 of sale. 
 
 The following kinds of agents who, owing to the effect of 
 judicial decisions, were excluded from the operation of the 
 previous Factors Acts, are, under the statutory definition now 
 given of a mercantile agent, equally excluded from the ope- 
 ration of the present Act : — 
 
 (1.) Agents who have the control or management of goods 
 only, as e.g., clerks or servants, cashiers, caretakers 
 and the like (u). 
 (2.) Agents with whom goods are deposited for safe cus- 
 tody, as e. (/., bailees, wharfingers and warehouse- 
 men (x). 
 (3.) Agents who are employed in the carriage of goods, 
 as e. ff., carriers or forwarding agents (y). 
 
 (2.) A person shall be deemed to be in posses- 
 sion of goods, or of the documents of 
 title to goods, where the goods or 
 documents are in his actual custody, or 
 
 (t) Goodwin v. Roberts, 1 App. Cas. 476 ; Lord Sheffield's Case, Boston 
 v. London Joint Stock Bank, 13 App. Cas. 333. 
 
 («) Lamb v. Attenborough, 1 B. & S. 831. 
 
 \x) Monk v. Whittenbunj, 2 B. & Ad. 484. 
 
 (y) Sellings v. Russell, 33 L. T. N. S. 380 ; and see City Rank v. Bar- 
 tow, 5 App. Cas. 664, 674.
 
 32 THE FACTORS ACT, 1889. 
 
 are held by any other person subject to 
 his control or on his behalf. 
 
 This re-enacts a provision contained in the 4th section of 
 the Factors Act, 1842. It enables a mercantile agent, who 
 has pledged goods for less than their value, to effect a further 
 pledge of the same goods for the surplus value remaining 
 after satisfying the first pledgee's claim ; being the extent to 
 which the first pledgee holds the goods subject to the agent's 
 control and on his behalf (b). 
 
 (3.) The expression "goods" shall include 
 wares and merchandize. 
 
 " Goods, wares and merchandize," comprehend all corporeal 
 moveable property, but not shares, stocks, choses in action, 
 and other incorporeal rights and property (c). The expres- 
 sion " goods" will, it is conceived, not only include wares 
 and merchandize, but will be restricted to the class of goods 
 coming under that description, viz., goods in a mercantile 
 sense. The Act contemplates only mercantile transactions ; 
 the agent must be a mercantile agent, and the goods of which 
 he is in possession, merchandize (d). 
 
 (4.) The expression " document of title" shall 
 include any bill of lading, dock warrant, 
 warehouse-keeper's certificate, and war- 
 rant or order for the delivery of goods, 
 and any other document used in the 
 ordinary course of business as proof of 
 the possession or control of goods, or 
 authorizing or purporting to authorize, 
 either by endorsement or by delivery, 
 the possessor of the document to transfer 
 or receive goods thereby represented : 
 
 This definition corresponds with the one given in the 
 
 (b) Portalis v. Tetley, 5 Eq. 140. 
 
 (c) Stock certificates were held not to be "goods" -within the meaning 
 of the earlier Factors Acts: Freeman v. Appletjard, 32 L. J. Ex. 175. 
 
 (d) It was held, under the Factors Act, 1842, that " goods" must have 
 this limited sense, and did not include furniture in a furnished house : 
 Wood v. Bowclife, 6 Hare, 191.
 
 THE FACTORS ACT, 1889. 33 
 
 4th section of the Factors Act, 1842, only omitting "India 
 warrants," a class of documents which are no longer in 
 use (/). 
 
 Documents of title are, strictly speaking, documents the 
 title represented by which is derived from the instrument 
 itself, and not from the title of the person from whom the 
 holder received it. But at common law it was necessary that 
 the transferor of a bill of lading should either himself have a 
 title to the goods represented, or be authorized to act for one 
 who had, and it is presumed that the transfer of a warrant or 
 delivery order had certainly no greater effect in passing 
 property than that of a bill of lading. We shall find, when 
 we come to consider the effect of a transfer of one of the 
 documents under the 10th section, that the Act has not 
 rendered them negotiable, as a bill of exchange is negotiable, 
 but has estopped the owner of goods who has issued such a 
 document from setting up a title as against the possessor 
 thereof. Independently of the Factors Acts, the Courts have 
 always declined to treat dock warrants, delivery orders, and 
 warehouse warrants or certificates as being documents of 
 title. The judicial interpretation of them has been that they 
 are mere "offers" or "tokens of authority" to receive 
 possession of goods, inchoate and incomplete until the 
 assignee has obtained the assent of the warehouseman or 
 other custodian of the goods to attorn to him. On the other 
 hand, the practice of merchants as repeatedly attested by 
 special juries, is to treat these documents (g) as transferring 
 by indorsement the actual possession of the goods which they 
 represent. Thus, in Lucas v. Dorrien (A), Dallas, C. J., said, 
 in reference to a dock warrant, ' ' I have been several times 
 stopped by a special jury, they being satisfied that the goods 
 pass from hand to hand by the indorsement of these instru- 
 ments. All special juries cry out with one voice that the 
 
 (/) Cf . also the definition given in the 78th section of the Larceny Act, 
 1861 {vide Appendix); and the definition of "delivery orders" and 
 "warrants" in the Stamp Act, 1870. 
 
 [g) Certainly dock warrants and certificates, but the practice as to 
 delivery orders is not so clearly established. 
 
 (h) 7 Taunt. 278. 
 P. D
 
 34 THE FACTOES ACT, 1889. 
 
 practice is that the produce lodged in the docks is trans- 
 ferred by indorsing over the certificates and dock- warrants." 
 Further, the Legislature based many enactments (the Factors 
 Acts, Legal Quays Act, and Sufferance Wharves Act) upon 
 the assumption that these documents are used in the ordinary 
 course of business " as proof of the possession or control of 
 goods," or "authorizing the possessor to transfer goods 
 represented thereby " (i). And the Factors Act, 1877, gave to 
 the transfer of one of these instruments from a vendee to a 
 sub-vendee or pledgee the same effect as the transfer of a bill 
 of lading already had at common law. 
 
 The important part of the definition is its concluding 
 clause. The question whether any particular document, as, 
 e.g., a wharfinger's certificate (which is expressly included as 
 a " document of title " in the Factors Act, 1825) comes within 
 the general words of the definition, must depend upon whether 
 the issuer of the document has represented therein that the 
 goods to which it refers are free from any vendor's lien. If 
 the document contains such a representation, the person 
 issuing it is estopped from setting up his claim as unpaid 
 vendor to the goods as against a bond Jide holder of the 
 document. Thus, when a wharfinger's certificate is in the 
 form of a delivery warrant, making the goods deliverable to 
 "A. B. or his assigns by indorsement or otherwise," the 
 certificate represents the goods and is used as proof of the 
 possession or control of them ; it is, therefore, equivalent to a 
 " document of title." If, on the other hand, the certificate 
 only states that the goods are ready for delivery, it is not 
 intended to represent the goods nor to entitle the holder to 
 possession of them ; it is, therefore, not equivalent toa" docu- 
 ment of title," and no alleged custom of trade can give it the 
 effect of one (/•). 
 
 (i) See Mr. Benjamin's remarks on the subject: Benjamin on Sale 
 (4th eel.), p. 829. 
 
 (A) Recent cases upon the construction of trade documents, alleged to 
 be "documents of title," are: Gunn v. Bolckow, Vaughan <£• Co. (1875), 
 16 Ch. 491 (wharfinger's certificate) ; Farmeloe v. Bain (187G), 1 C. P. D. 
 445 ("undertakings" to deliver); Merchant Banking Co. v. FkcenUs 
 Bessemer Steel Co. (1877), 5 Ch. D. 205 (iron warrants).
 
 THE FACTOES ACT, 1889. 35 
 
 (5.) A pledge shall include any contract pledg- 
 ing or giving a lien or security on goods, whether 
 in consideration of an original advance, or of any 
 further or continuing advance, or of any pecu- 
 niary liability. 
 
 Under the first section of the Factors Act, 1842, which 
 contained the pre-existing law with relation to pledges, the 
 only valid consideration for a pledge was an actual money 
 advance made by the pledgee to the agent, or to some third 
 person at the agent's request. By the words " or of any 
 pecuniary liability" (which were added to the Bill in the 
 Standing Committee on Trade), the Legislature has extended 
 the consideration so as to include any pecuniary liability 
 incurred by the pledgee on the agent's behalf. It is pre- 
 sumed that by a pecuniary liability is meant a liability to 
 pay money, whether in prasenti or infuturo, and not a liability 
 accrued due (i. e., a debt arising from a liability), as distin- 
 guished from an accruing liability. Thus, e.g., a liability in 
 respect of bills accepted by the pledgee on the agent's account, 
 which may or may not ripen into an actual debt, or a liability 
 incurred under a guarantee, or as surety, would be a valid 
 consideration for a pledge. 
 
 "VVe shall have occasion to refer to this point again in con- 
 nection with the power conferred under the fourth section of 
 the Act upon the agent to pledge in respect of a pre-existing 
 liability as well as a pre-existing debt {post, pp. 47 et seq.). 
 
 The provisions of the Factors Act, .1842, were framed en- 
 tirely with reference to the case of an actual money pay- 
 ment being made to the agent by the pledgee ; but as the 
 joint effect of this and the 5th section of the present Act, the 
 consideration for a pledge may now be either an advance 
 made to the person or a pecuniary liability incurred on his 
 behalf, or the transfer to him of other goods or of a document 
 of title, or " any other valuable consideration," the effect of 
 which we shall consider in dealing with the fifth section. 
 
 "We may remark that the " further or continuing advance " 
 need not necessarily be made to the same person to whom the 
 
 d2
 
 36 THE FACTOES ACT, 1889. 
 
 original advance was made, but may be made to a third 
 person at tlie agent's request (m). 
 
 (6.) The exj:>ression " person" shall include any 
 body of persons, corporate or unincorporate. 
 
 See now sect. 19 of the Interpretation Act, 1889. 
 
 Dispositions hj Mercantile Agents. 
 
 2. — (1.) Where a mercantile agent is, with the 
 consent of the owner, in possession of goods or of 
 the documents of title to goods, any sale, pledge, 
 or other disposition of the goods, made by him 
 when acting in the ordinary course of business 
 of a mercantile agent, shall, subject to the pro- 
 visions of this Act, be as valid as if he were 
 expressly authorized by the owner of the goods 
 to make the same ; provided that the person 
 taking under the disposition acts in good faith, 
 and has not at the time of the disposition notice 
 that the person making the disposition has not 
 authority to make the same. 
 
 This second section of the Act in effect provides that a 
 mercantile agent who is, with the consent of the owner, in 
 possession of goods, or of the documents of title to goods, shall 
 have implied authority to make a sale, pledge, or other dis- 
 position of the goods, provided (1) that he is acting in the 
 ordinary course of business of a mercantile agent ; (2) that 
 the person taking under the disposition acts in good faith, 
 and without notice of the agent's want of authority. 
 
 Turning to the corresponding provision of the earlier 
 Factors Acts, we find that they in effect provided that an 
 agent intrusted with and in possession of goods, or of the docu- 
 ments of title to goods, should have implied authority to make 
 
 (m) Sheppard v. The Union Bank of London, 7 H. & N. 661, overruling 
 the contrary opinion of Wood, V.-C, in Portalis v. Title//, 5 Eq. at 
 p. 146.
 
 THE FACTORS ACT, 1889, ']7 
 
 a valid sale or pledge of the goods, provided (1) that the dis- 
 position was made in the ordinary course of business, and 
 (2) that the purchaser or pledgee had no notice that the 
 agent was acting maldjide, or without authority (w). 
 
 The present Act substantially confirms the law as contained 
 in the previous Factors Acts, and interpreted by judicial 
 decisions. For the "agent intrusted and in possession" of 
 the previous Acts, it substitutes a mercantile agent in posses- 
 sion with the owner's consent, that is to say, a mercantile 
 agent as previously defined, viz., one having authority either 
 to sell goods, or to consign them for sale, or to buy or to 
 pledge goods. But, as we have already stated, this change 
 of language does not seem to effect any change in the law 
 except by placing an authority to pledge upon the same footing 
 with an authority to sell. 
 
 "With reference to the owner's consent, the Act provides 
 that possession shall be only presumptive evidence of the 
 owner's consent thereto. (Sect. 2, sub-sect. 4.) The Legis- 
 lature never of course intended to authorize an agent to dis- 
 pose of his principal's property without his consent, and it 
 accordingly leaves it open to the owner to prove that the 
 agent's possession was obtained without his consent. But the 
 fact that the consent of the owner has been obtained by 
 fraud will not affect the title of a person claiming under a 
 disposition made by the agent, provided that the owner has 
 been induced by the fraudulent representations to give the 
 agent possession of the goods or documents of title, as his 
 agent, or, in the language of the previous Factors Acts, has 
 intrusted the agent therewith (o). But if an agent obtains 
 mere possession of the goods or documents by fraud with- 
 out being intrusted, i. e., without receiving possession as agent 
 of the owner, or as vendee, then he has no title at all, either 
 as principal or agent, and can convey none to anybody else 
 either at common law or under the Factors Act ( p). This was 
 
 («) This is the effect of sects. 2 and 4 of the Act of 182-5, and sects. 1 
 and 2 of the Act of 1842. 
 
 (o) Sheppard v. Union Bank of London, 7 H. & N. 66 ; cf. Vickers v. 
 Hertz, L. R. 2 H. L. (Sc.) 113 ; and Babies v. Swainson, 4 B. & S. 270. 
 p) Eingsford v. Merry, 11 Ex. 577 ; and in Cam. Scacc. 1H.&N, 503.
 
 38 THE PACTOES ACT, 1889. 
 
 the point decided in Kingsford v. Merry {jj), a case which 
 created some excitement among city merchants who did not 
 at first understand its true import. 
 
 As to "possession," "goods," "documents of title," and 
 "pledge," see the definitions given in the first section, and 
 the notes thereon (a?ite, pp. 31 — 36). 
 
 " Sale, pledge, or other disposition." The Act does not 
 expressly provide for the case of an agent contracting to sell 
 or pledge goods before he has obtained possession of them, 
 and it seems to require, for the validity of a sale or pledge, 
 that the agent should be already in possession of the goods or 
 documents of title. With regard to a sale, if the question 
 arises for decision, it will probably be held, as under the pre- 
 vious Factors Acts, that it is sufficient for the agent to be in 
 possession of goods or documents of title for the purpose of 
 completing a sale which he has already entered into (q) ; but 
 it is more doubtful whether the protection of the Act can be 
 extended to the case of an agent being advised that goods are 
 coming forward to him, and agreeing to pledge them as soon 
 as he gets them, and the bills of lading are in his hands (r). 
 
 With reference to the "other disposition" referred to in 
 the section. It was held under the Factors Act, 1825, on 
 the meaning of the words "sale or disposition" used in 
 the second section of that Act, that the Legislature, by the 
 introduction of the term " disposition," did not intend to 
 protect any transaction which was essentially distinct from a 
 sale or pledge. And, therefore, when it appeared that the 
 transaction in question was neither in the nature of a sale, 
 nor was such a pledge as was contemplated by the statute, it 
 was held that it did not come within the protection of the 
 Factors Act at all (s). But it is not necessary to put this 
 narrow construction upon the language of the present Act, 
 because the fifth section of the Act expressly gives validity to 
 
 (p) 11 Ex. 577 ; and in Cam. Scacc. 1 H. & N. 503. 
 
 (q) Vichers v. Hertz, L. R. 2 H. L. (Sc.) App. 113 ; Fucntcs v. Montis, 
 L. R. 3 C. P. at p. 279, per Willes, J. 
 
 {r) This case was possibly provided for in the 4th section of the Factors 
 Act, 1842. See per Wood, V.-C, in Portalis v. Tetleij, 5 Eq. 140. 
 
 (s) Taylor v. Kcymer, 3 B. & Ad. 320, 337; Taylor v. Trueman, 1 Moo. 
 & M. 453.
 
 THE FACTOKS ACT, 1889. 39 
 
 a salo or pledge, the consideration for which is not a pecuniary 
 one, but the delivery or transfer of other goods or documents 
 of title to goods, or in other words empowers a mercantile 
 agent to barter the goods of his principal, which he was pro- 
 hibited from doing at common law (7). Effect may, therefore, 
 be given to the " other disposition" of the second section by 
 reference to the barter, exchange, or other disposition rendered 
 valid by the fifth section . 
 
 "In the ordinary course of business of a mercantile agent." 
 Selling and pledging are assumed to be within the ordinary 
 scope of business of a mercantile agent, and a purchaser or 
 pledgee will not be under the obligation of proving that the 
 sale or pledge was made in the ordinary course of business, 
 although when the facts have been proved it may turn out 
 that the circumstances in which the transaction was carried 
 out were so unusual and out of the course of business as not 
 to bring the transaction within the protection of the Act («). 
 
 The section contains the proviso that ''the person taking 
 under the disposition acts in good faith, and has no notice of 
 the agent's want of authority." 
 
 It is not the object of the Legislature to authorize an agent 
 to pledge another man's property, or to deviate from the 
 authority he has received from the owner, and its purpose is 
 only to protect bond fide dispositions. There must be a bond fide 
 advance made to the agent, or a bond fide liability incurred on 
 his behalf by the pledgee. If the transaction is only colour- 
 ably an advance, and is in reality a means of relieving the 
 pledgee from a liability, the transaction will be invalidated. 
 Thus, when the pledgee was liable jointly with a factor on a 
 bill of lading which was overdue, and advanced money to the 
 factor upon the security of goods for the purpose of taking up 
 the bill, the jury were directed that if the transaction was only 
 a circuitous move of paying the bill upon which the pledgee 
 was liable, it was not protected by the Factors Act, 1825 (v). 
 The question of bona fides is one for the jury to decide. 
 
 {t) Guerreiro v. Peile, 3 B. & Aid. 616. 
 
 (u) Upon this point, see the judgment of Wilde, B., in Shcppard v. 
 Union Bank of London, 7 H. & N. at p. 673. 
 (v) Learoyd v. Robinson, 12 M. & W. 743.
 
 40 THE FACTORS ACT, 1889. 
 
 As the present Act, like the previous Factors Acts, is silent 
 as to what will constitute notice, it must be left to the ordinary 
 principles of evidence. The notice may be actual or con- 
 structive. Actual notice may be verbal or in writing (since 
 the Act does not stipulate for a written notice). "With regard 
 to constructive notice, it was held by Lord Tenterden, in 1830, 
 that notice includes not only a knowledge of the agent's want 
 of authority arising from direct communication, but a know- 
 ledge of circumstances, from which a reasonable man of busi- 
 ness, applying his understanding to them, would know that 
 such was the case (x). This statement has been cited with 
 approval in subsequent decisions, but the modern tendency, no 
 doubt, is to limit the doctrine of constructive notice, and not 
 readily to extend it to honest mercantile transactions. It seems 
 to be doubtful how far knowledge, from whatever source 
 derived, will, as distinguished from notice, affect the validity 
 of the transaction, but it is certain that mere suspicion that 
 the agent is acting without authority will not be sufficient to 
 deprive the person dealing with him of the protection afforded 
 by the statute (y). 
 
 (2.) Where a mercantile agent has, with the 
 consent of the owner, been in possession of goods 
 or of the documents of title to goods, any sale, 
 pledge, or other disposition, which would have 
 been valid if the consent had continued, shall be 
 valid notwithstanding the determination of the 
 consent : provided that the person taking under 
 the disposition has not at the time thereof notice 
 that the consent has been determined. 
 
 This sub-section provides for the case of a secret revocation 
 of the agent's authority. 
 
 (x) Evans v. Trueman, 1 Moo. & Rob. 10. 
 
 (y) On the subject of notice, the reader may consult Evans v. Trueman, 
 supra ; Gobund Chunder Sein v. Ryan, 9 Moo. Ind. App. 140 ; Navulshaw 
 v. Brownrigg, 2 De G. M. & G. 44 ; Ealtenbach v. Lewis, 24 Ch. D. 54 
 (C. A.); 10 App. Cas. G17.
 
 THE FACTORS ACT, 1889. 41 
 
 Under tho Factors Act, 1842, it was held in Fuentes v. Mon- 
 tis (s), in 1868, that a pledge of goods made by a factor after 
 the revocation of his authority was not protected by the Act, 
 although tho person making the advance had no notice of the 
 revocation, the proviso contained in the fourth section of 
 the Factors Act, 1842, enabling the owner of the goods to 
 prove that at the time of the pledge the agent was not in 
 fact "intrusted" with the goods. This decision much shook 
 the confidence felt by merchants, bankers, and others in making 
 advances to factors on the security of goods intrusted to them, 
 for they had no means of ascertaining whether the foreign 
 consignor had or had not revoked the factor's authority. 
 Consequently, in 1877, the Legislature intervened and amended 
 the law on this point, and this sub-section substantially re- 
 enacts the second section of the Factors Act, 1877. 
 
 It may be observed that a sale made by a factor after the 
 revocation of his authority would be valid independently of 
 this statutory provision, the rule of the common law being 
 that when a principal employs a factor, he will be bound by 
 contracts made by him on his behalf, even after he has revoked 
 the agency, provided that the person dealing with the factor 
 had no notice of the revocation (a). 
 
 (3.) Where a mercantile agent has obtained 
 possession of any documents of title to goods by 
 reason of his being or having been, with the 
 consent of the owner, in possession of the goods 
 represented thereby, or of any other documents 
 of title to the goods, his possession of the first- 
 mentioned documents shall, for the purposes of 
 this Act, be deemed to be with the consent of the 
 owner. 
 
 This sub -section deals with the case of an agent who is in 
 possession of documents of title, which he has been enabled 
 
 (z) L. R. 3 C P. 268. 
 
 («) Trucman v. Loder, 11 A. & E. 589.
 
 42 THE FACTORS ACT, 1889. 
 
 to obtain through, his possession of goods represented thereby, 
 or of other documents of title, and it enacts that the posses- 
 sion of these first-mentioned documents shall bo doomed to be 
 •with the owner's consent. Where a mercantile agent receives 
 from the owner possession of goods, or of a bill of lading, by 
 moans of which he is enabled to obtain possession of a dock 
 warrant, delivery order, &c, there will be prima facie pre- 
 sumption that the owner consented to his being in possession 
 of these latter documents, and a sale or pledge effected by 
 means of them will be protected by the Act, it being open to 
 the owner, however (under sub-sect. 4, infra), to prove that 
 the possession was not with his consent, which he might do 
 by showing that he had expressly prohibited the agent from 
 obtaining the documents. 
 
 Under the two earlier Factors Acts of 1823 and of 1825 it 
 was decided that, in the absence of evidence to prove that the 
 possession of the document was necessary for the purpose of 
 sale, the document pledged must have been derived im- 
 mediately from the owner of the goods, on the ground that 
 to constitute an " intrustment " of the document it was neces- 
 sary that the owner should have intended the factor to possess 
 it in the particular form in which it was at the time of the 
 pledge, and that intrusting an agent with the document was 
 essentially different from enabling him to become possessed 
 of it (Z>). The Act of 1842 amended the law as laid down in 
 these decisions, and enacted that mere possession of a 
 "derivative" document of title should be prima facie evidence 
 of an "intrustment" of it, and this sub- section substantially 
 re-enacts the provision contained in the first section of the 
 Factors Act, 1842, substituting, as before, "possession with 
 consent" for "intrustment." 
 
 (4.) For the purposes of this Act the consent 
 of the owner shall be presumed in the absence of 
 evidence to the contrary. 
 
 It is not the object of the Legislature to authorize an agent 
 (l>) Phillips v. Uuth, 6 M. & W. 572 ; Hatfield v. Phillips, 9 M. & W. 672.
 
 THE FACTORS ACT, 1889. 43 
 
 to dispose of his principal's property without tlie principal's 
 consent. Consent will be prima facie presumed from the fact 
 of possession, but it will be open to the owner to rebut the 
 presumption by proving that he has not clothed the agent 
 with the apparent authority to deal with his property. Thus, 
 when the agent obtains possession of the goods feloniously, 
 or contrary to or without the authority express or implied of 
 the owner, the Act will not apply. But the owner's consent 
 will be implied from his knowledge of and acquiescence in 
 the agent's possession. 
 
 3. A pledge of the documents of title to goods 
 shall be deemed to be a pledge of the goods. 
 
 The object of this section, it is believed, is to remove the 
 doubt which has been expressed as to whether the third 
 section of the Factors Act, 1825, which was very in artistically 
 framed, extended to protect a pledge of a document of title to 
 goods made by a factor in respect of a pre-existing debt. 
 Generally, under the earlier Acts, it was provided that a 
 pledge of a document of title should have the same effect as a 
 pledge of the actual goods. (See the second and third sections 
 of the Factors Act, 1825, the first section of the Factors 
 Act, 1842, and the third and fourth sections of the Factors 
 Act, 1877.) 
 
 4. Where a mercantile agent pledges goods as 
 security for a debt, or liability due from the 
 pledgor to the pledgee before the time of the 
 pledge, the pledgee shall acquire no further right 
 to the goods than could have been enforced by 
 the pledgor at the time of the pledge. 
 
 This section deals with the case of a pledge made by a 
 mercantile agent as security for a pre-existing debt or liability 
 due from him to the pledgee, and it provides that the pledgee 
 shall acquire only the same right to the goods which could 
 have been enforced by the agent at the time of the pledge, or
 
 44 THE FACTORS ACT, 1880. 
 
 in other words, that tho pledge operates only as a transfer of 
 the agent's lien so far as it is enforceable at the time of the 
 pledge, and is a valid security to that extent only. 
 
 The case of a pledge made in respect of a pre-existing debt 
 formed the subject-matter of the third section of the Factors 
 Act, 1825 (e), and this section of the present Act, while con- 
 firming the old law as to the effect of a pledge for a past 
 consideration, at the same time goes further, and amends the 
 law in two important particulars : (1) in repealing the proviso 
 as to notice of the pledgor's agency contained in the Factors 
 Act, 1825; (2) in extending to an antecedent liability the 
 protection which was previously confined to an antecedent 
 debt. 
 
 Under the Factors Act, 1825, a pledge made by a factor in 
 respect of a pre-existing debt was valid only when the pledgee 
 had no notice of the pledgor's agency, and a clause in the 
 third section of the Factors Act, 1842, was inserted apparently 
 with the object of retaining this proviso (d). Under the 
 present Act, the fact that the pledgee has notice that he 
 is dealing with an agent will not affect the validity of the 
 pledge. 
 
 Again, while under the Factors Act, 1825, it was required 
 that the pledge should be one in respect of an " antecedent 
 debt or demand" (these last words not widening the considera- 
 tion), the present Act extends its operation to an " antecedent 
 debt or liability" due from the pledgor to the pledgee, the 
 effect of which we shall have to consider later on. 
 
 The subject-matter of the section may be conveniently 
 treated under the following heads: — (1) The nature of a 
 factor's lien ; (2) what constitutes a lien entitling a factor to 
 pledge under this section ; and (3) what constitutes an ante- 
 cedent debt or bability. 
 
 (1 .) The nature of a factor's lien. 
 
 At common law a factor, — and a broker who is in possession 
 of goods about which he is employed has a corresponding 
 
 (c) It is assumed that the 3rd section of the Factors Act, 1842, had no 
 effect in repealing the 3rd section of the Factors Act, 1825 : vide Jcwan v. 
 Whilworth, 2 Eq. at p. 703. 
 
 (d) See Russell on Mercantile Agency (ed. 1873), p. 120.
 
 THE FACTORS ACT, 1889. 45 
 
 right, — is entitled to a general lien upon the goods of his 
 principal in his possession as factor, not only for all charges and 
 disbursements incurred and paid in relation to the particular 
 goods, but also for the general balance of the account between 
 him and his principal (e). This lien entitles him to retain 
 possession of the goods until his claims upon his principal aro 
 satisfied. It is deemed to exist in all cases, unless the con- 
 trary presumption is clearly established, but it fails when the 
 contrary presumption is clearly established, or d fortiori, if 
 an express agreement repelling it is proved (f). At common 
 law, the lien, being only the right to retain possession, could 
 not be transferred (g) ; and one effect of the Factors Acts was 
 to abrogate the common law rule so far as relates to pledges 
 made by mercantile agents. It is important to observe that 
 the factor's lien only extends to goods which have come into 
 his possession as factor. It follows that if the goods are in the 
 agent's possession as bailee, or wharfinger, or warehouseman, 
 and the agent carries on business at the same time as a factor, 
 he cannot make a valid pledge of the goods under this section, 
 because, having received the goods as bailee, wharfinger, or 
 warehouseman, he has no lien which he can transfer to the 
 pledgee. Again, the factor's right of lien will be defeated 
 when he has obtained possession of the goods by means of 
 false representations, or in a manner not authorized by the 
 principal (A). It has been decided that a factor does not lose 
 his right of lien because he has received particular instructions 
 as to the price and the manner of sale (*'). 
 
 (2.) What constitutes a lien entitling the factor to pledge 
 the goods under this section. 
 
 The lien under this section must be a right enforceable by 
 the factor at the time of the pledge. Under sect. 5 of the 
 Act of 1825, which was similarly worded, and which may 
 therefore serve as an illustration, although it did not deal 
 with the subject of antecedent debts, it was held that a factor's 
 
 (e) Kruger v. Wilcox, Amb. 252. 
 
 (/) Story on Agency, § 378. 
 
 (y) Daubiyny v. Duval, 5 T. R. 604 ; M'Combie v. Davies, 7 East, 6. 
 
 (h) Madden v. Kempstcr, 1 Camp. 12 ; Taylor v. Robinson, 8 Taunt. 648. 
 
 (i) Stevens v. Biller, 25 Ch. D. 31.
 
 46 THE FACTORS ACT, 1889. 
 
 liability under acceptances for his principal did not amount 
 to a lien which ho could transfer to a pledgee, because such 
 a liability was not enforceable at the time of the pledge, the 
 right to enforce being interpreted to mean the right to call 
 for the payment of money (k). But it is to be observed, that 
 the ratio decidendi of Blandy v. Allan was principally based 
 upon a comparison of the 8th section of the Factors Act, 1825, 
 which provided that the acceptance of bills by a factor should 
 not create a lien so as to protect the factor on a charge 
 of misdemeanor for illegal pledging. But this 8th section 
 was soon after repealed (by 7 & 8 Geo. IV. c. 29, s. 51), and 
 the Larceny Act (7), which now embodies the law on this 
 subject, expressly provides (sect. 78) that a factor may add 
 to the actual money debt due to him from his principal the 
 amount of any bill of exchange drawn by or on account of 
 his principal. On the assumption that the present section 
 would be interpreted in the light of this provision, it is sub- 
 mitted that a factor's liability under acceptances will now 
 constitute a lien entitling him to pledge under this section (m). 
 Even if the factor under acceptances cannot transfer an abso- 
 lute lien, there seems no reason why he should not be able to 
 transfer the conditional lien which he possesses. So long as 
 he is under liability in respect of bills of exchange accepted 
 on his principal's behalf, he is entitled to be indemnified by 
 his principal against such liability, and this is a right which 
 he can enforce against his principal so long as the liability 
 exists. If the principal discharges the liability, the lien is 
 lost, and a pledgee of the goods cannot retain them as against 
 the owner ; but until the liability is discharged there seems 
 no reason why the pledgee should not exercise the defeasible 
 lien which the factor was in a position to transfer to 
 him. 
 
 Again, it has been held that a mere money claim of the 
 factor against his principal will not constitute a lien entitling 
 the factor to pledge under this section, unless it appears that 
 
 {k) Fletcher v. Heath, 7 B. & C. 517 ; 1 M. & R. S35 ; Blandy v. Allan, 
 3 C. & P. 44 ; Danson & Lloyd, 22. 
 (I) 24 & 25 Vict. c. 96. See Appendix (2), post, p. 76. 
 {»>) On this point seo Russell on Mercantile Agency, p. 120.
 
 THE FACTORS ACT, 1889. 47 
 
 the general balance of account was in his favour at the time 
 of the pledge (»). 
 
 (3.) What constitutes an antecedent debt or liability. 
 
 On this subject there have been several cases arising under 
 the 3rd section of the Factors Act, 1825, which dealt with 
 pledges made as a security for a pre-existing " debt or 
 demand," and the effect of the decisions given in those cases 
 was, that there must be an actual debt owing from the agent 
 to the pledgee at the time of the pledge, and that a mere 
 liability of the agent which might ultimately ripen into a 
 debt was not within the meaning of the Act. 
 
 In Jewan v. WhiticortJi (o), a factor was liable as surety to 
 W., "W. having bought goods in his own name, but on the 
 factor's behalf. The factor deposited with "W., and W. de- 
 posited with C. the bill of lading of a cargo of goods belonging 
 to the factor's principal, on the security of which C. made 
 advances in order to discharge W.'s indebtedness under his 
 contracts of purchase. Held that the transaction was not a 
 pledge in respect of an antecedent debt, because the factor 
 was not indebted to W. at the time of the pledge, but was a 
 pledge in respect of a bond fide advance made by C. to the 
 factor. 
 
 In Macnee v. G'o7'st(p), a factor was liable to G. on a bill 
 of exchange, which G. had accepted on his behalf, and also on 
 a resale of goods made by Gr. at a loss, and pledged goods with 
 G. as security in respect of these transactions. Held that in 
 the absence of a money advance the transaction was not protected 
 by the Factors Acts, and semble that the pledge was made in 
 respect of an antecedent debt. Lord Ha therley said, "If I 
 should be wrong in that view (of indebtedness), and if this 
 should not be an antecedent debt, but only a liability, then I 
 think it is a transaction which is not protected by the statute, 
 because I read the 3rd section of 5 & 6 Vict. c. 39, as pro- 
 tecting nothing except an actual advance of money." 
 
 In Kaltenbach v. Leicis (q), M., a factor, was liable to L. on 
 
 (>i) Robertson v. Kensington, 5 M. & Ry. 381. 
 (o) L. R. 2 Eq. 692. 
 (p) L. R. 4 Eq. 315. 
 \g) 10 App. Cas. 617.
 
 48 THE FACTORS ACT, 1889. 
 
 the purchase of goods which L. had made on M.'s behalf. L. 
 gave M. money to enable him to pay for the goods, and 
 M. pledged with L. goods of his principal as security for L.'s 
 advance. Held by the House of Lords (confirming the Court 
 of Appeal upon this point) that the pledge was not made in 
 respect of an antecedent debt, because at the time of the 
 pledge M. was not indebted to L., but was only under a 
 liability to him for the debt owing from L. to the vendors of 
 the goods, which liability would not become a debt until after 
 the vendors had been paid. 
 
 "We have already pointed out that the language of this 
 section differs from that of the 3rd section of the Factors 
 Act, 1825, in providing that a valid pledge may be made to 
 secure a "liability due" as well as a " debt due" from the 
 pledgor to the pledgee at the time of the pledge. The 
 expression " liability due " is perhaps a little ambiguous, but 
 there can be no doubt that the Legislature intends by the 
 phrase any liability accruing due, and not a liability already 
 accrued due, as distinguished from a mere liability which may 
 or may not ripen into a debt(r). If the words "liability 
 due" were to receive this latter limited construction, they 
 would be merely words of surplusage, because the term 
 "antecedent debt" includes a liability which has accrued 
 due, and so ripened into a debt, and this latter species of 
 debt is only distinguishable from the former in respect of 
 its source being a liability, and not an actual money ad- 
 vance. It is presumed that the liability intended is a pecu- 
 niary one, i. e., a liability to pay money. This may be 
 inferred from the 5th clause of the first section of the Act, 
 which expressly provides that the present consideration for a 
 pledge may be either an advance or a pecuniary liability (in- 
 curred by the pledgee) which, under the form of a past con- 
 sideration with which the 4th section is concerned, become 
 respectively, from the point of view of the pledgor, an antece- 
 
 (»•) As confirmatory of this view, we may notice that in Sir J. Lub- 
 bock's Bill, upon the lines of which the present Act was drawn, an 
 " antecedent debt" was expressly defined to include " any contingent or 
 accruing debt, or liabibty previously contracted" ; and Sir J. Lubbock, 
 in introducing the Bill, referred to the intention of the framers of the Bill 
 to amend the law in this direction.
 
 THE FACTORS ACT, 1889. 49 
 
 dent debt or a pecuniary liability "duo," i.e., accruing due 
 from the pledgor to the pledgee in rospect of the liability pre- 
 viously incurred by the latter on the former's behalf. It is 
 therefore submitted that the object of the Legislature in pro- 
 tecting a pre-existing liability as well as a pre-existing debt 
 was to avoid the effect of the decisions to which we have just 
 referred, which were based upon the distinction between a 
 liability and a debt. Illustrations of an antecedent liability 
 may be drawn from those cases. Thus the liability of the 
 pledgor to the pledgee on a bill of exchange already accepted 
 by the pledgee on the pledgor's behalf, as in Macneev. Gorsf, 
 or the liability of the pledgor to the pledgee on purchases 
 made by the pledgee as the pledgor's broker, as in Jewan v. 
 Whitworth, and Kaltenbach v. Lewis, would now form a valid 
 consideration for a pledge to the extent of the pledgor's lien 
 on the goods, although the liability would only ripen into a 
 debt when the pledgee had met the bill of exchange, or had 
 paid the purchase-money to the vendors. 
 
 It is to be observed that, in order to bring a pledge within 
 this section, it must be made to the same person to whom the 
 pledgor is already indebted or liable. Thus the section does 
 not apply to the case of a pledgee who bondjide advances 
 money upon the security of the pledge, although the object 
 of the advance may be to discharge the antecedent debt or 
 liability of the pledgor to another person, and the pledgee is 
 protected to the full extent of his advance under the second 
 section of the Act (s). 
 
 5. The consideration necessary for the validity 
 of a sale, pledge, or other disposition, of goods, 
 in pursuance of this Act, may be either a pay- 
 ment in cash, or the delivery or transfer of other 
 goods, or of a document of title to goods, or of a 
 negotiable security, or any other valuable con- 
 sideration ; but where goods are pledged by a 
 mercantile agent in consideration of the delivery 
 
 (*) See Jewan v. Whitworth, 2 Eq. G92. 
 P. E
 
 50 THE FACTORS ACT, 1889. 
 
 or transfer of other goods, or of a document of 
 title to goods, or of a negotiable security, the 
 pledgee shall acquire no right or interest in the 
 goods so pledged in excess of the value of the 
 goods, documents, or security when so delivered 
 or transferred in exchange. 
 
 This section deals with the consideration necessary for the 
 validity of a sale, pledge, or other disposition of goods made 
 in pursuance of the Act, and its effect is, by widening the 
 class of valid dispositions, to extend the application of the 
 statute to transactions of a description which had not been 
 protected under the earlier Factors Acts. Those enactments 
 required, for the validity of a sale or pledge made by a factor 
 or agent for sale, that the consideration should be a pecuniary 
 one. By the second section of the Factors Act, 1825, which 
 (with the fourth section of the same Act) embodied, previous 
 to the present Act, the existing law relating to sales, a person 
 intrusted with and in possession of a document of title was 
 enabled to make a valid contract for the " sale or disposition " 
 of goods ; but it was decided, soon after the passing of the Act, 
 that the additional word "disposition" did not enlarge the 
 class of valid transactions, and that the disposition must be a 
 transaction in the nature of a sale, and no protection was 
 given to an exchange of securities (t). 
 
 The first section of the Factors Act, 1842, which contained 
 the existing law relating to pledges, gave validity to any 
 pledge made by way of security for an " original loan, 
 advance, or payment as also for any further or con- 
 tinuing advance"; and although the second section of the 
 same Act amended the earlier law by extending protection 
 to a bond fide exchange of securities, viz., when the agent 
 pledges fresh securities in exchange for those originally 
 pledged, the consideration for the pledge was treated as 
 exceptional, and the same validity was given to the pledge 
 "as if the consideration for the same had been a lona fide 
 present advance of money." 
 
 (*) Taylor v. Kymer, 3 B. Sc Ad. 320, 337.
 
 THE FACTORS ACT, 1889. 51 
 
 Under the earlier Factors Acts, then, a money payment, and 
 nothing else, formed the necessary consideration for the validity 
 of a sale or pledge made by a factor, or other agent for sale. 
 
 Now, the present section of the new Act enlarges the nature 
 of the consideration. It may consist of: — (1) a payment in 
 cash as before, viz., in the case of a sale, the price (w), or, in 
 the case of a pledge, an advance ; or (2) the delivery or 
 transfer of other goods, or of a document of title to goods, or 
 of a negotiable security, thus empowering the agent, by an 
 out-and-out disposition, to barter the goods of his principal, 
 or to pledge them in exchange for other goods or documents 
 of title, or negotiable securities ; or (3) any other valuable 
 consideration, which must be taken to include a pecuniary 
 liability, which is now a valid consideration for a pledge 
 under the first (fifth clause) and fourth sections of the Act. 
 
 Now, by the common law, a factor had no authority to 
 dispose of the goods of his principal by way of barter, and 
 the principal's property in the goods was not divested by such 
 a disposition, and he could maintain trover against the 
 person with whom they were bartered (x). The effect of this 
 section is to abrogate the common law rule on this point. It 
 has been observed that, under the second section (first clause) 
 of the Act, the " sale, pledge, or other disposition " must be 
 made by the agent when acting "in the ordinary course of 
 business of a mercantile agent." Now, to barter goods is not 
 in the ordinary course of such an agent's business, so that a dis- 
 position by way of barter, although rendered valid by the fifth 
 section, would not fulfil the condition imposed by the second 
 section as necessary to its validity. This difficulty may be 
 met by the assumption that the fifth section in effect declares 
 that sale, for the purposes of the Act, shall include barter, 
 although they are quite distinct transactions (y), when it would 
 
 (>/) It is unnecessary that money should actually pass on a sale, because 
 the buyer may set off against the price a debt due from the agent to him- 
 self. It was held, under the 4th section of the Factors Act, 1825, that 
 the goods may be transferred for an antecedent debt : Thackrah v. Fer- 
 guson, 25 W. E. 307. 
 
 (x) Querreiro v. Telle, 3 B. & Al. 616. 
 
 (l/) See Benj. on Sale (4th ed.), p. 1. 
 
 e2
 
 52 THE FACTORS ACT, 1889. 
 
 follow that, as sale is in tlie ordinary course of the agent's 
 business, barter also would be deemed to be so. 
 
 The latter portion of the section, which deals with the case 
 of a pledge of goods made in exchange for other goods, or of 
 a document of title, or of a negotiable security, contemplates 
 not only a transaction which is in its inception an exchange, 
 but also one where the agent has originally pledged goods or 
 securities for a money advance, and afterwards substitutes other 
 goods or securities in exchange for those originally pledged. 
 
 Here it is necessary to refer briefly to the provisions of the 
 previous Factors Acts relating to this subject. Under the 
 second section of the Factors Act, 1825, which provides for 
 pledges made by persons in possession of documents of title, 
 and which required that an advance should be made upon the 
 faith of the documents deposited, it was held that a bond fide 
 exchange of securities, the later securities being deposited as 
 a security for the advance previously made on the security of 
 the original securities, was not protected, on the ground that 
 there was no advance made by the pledgee at the time of the 
 pledge on the faith of the substituted securities. These latter 
 were, in fact, deposited as security for an antecedent debt due 
 from the pledgor to the pledgee. N. & Co., who were factors, 
 purchased for the plaintiffs, their principals, certain chests of 
 indigo, then lying in the East India Company's warehouses, 
 for which they obtained the warrants. N. & Co. had pre- 
 viously borrowed money from the defendants, and had 
 deposited with them as security other warrants for indigo. 
 Being desirous to obtain these warrants, they deposited with 
 the defendants in exchange the warrants for the goods belong- 
 ing to the plaintiffs. The plaintiffs brought trover for these 
 warrants, and it was held that they were entitled to recover. 
 Lord Tenterden, who tried the action, said, in the course of his 
 judgment : " Holding the warrants originally deposited with 
 them as securities, the defendants give them up, and receive 
 the warrants in question in exchange. This does not appear 
 to me a transaction within the second section of the statute. 
 It is no pledge or deposit of them as a security for money 
 advanced on the faith of them ; for the money for which they 
 are a security was previously due, namely, in the former trans-
 
 THE FACTORS ACT, 1889. 53 
 
 actions, when the warrants for which they were exchanged 
 came into the hands of tho defendants " (z). The second sec- 
 tion of the Factors Act, 1842, amended tho law on this point, 
 and provided that where an advance had been made to a factor 
 on the security of goods, documents of title, or negotiable secu- 
 rities, and these are given up by the pledgee in exchange for 
 other goods, documents of title, or negotiable securities de- 
 posited in their place, the pledgee should have a lien upon 
 these latter to the extent of the value of the goods, documents 
 of title, or securities delivered up in exchange, and this section 
 of the Act re-enacts the second section of the Act of 1842. 
 
 It has been decided that the transaction will be protected 
 although the goods or securities originally pledged have not 
 been pledged by the agent who pledges the substituted goods 
 or securities («). Thus, where a person pledges goods upon 
 the guarantee of another person, and the guarantor after- 
 wards comes into possession of goods as a mercantile agent, 
 and substitutes those goods in lieu of the goods originally 
 pledged by the person for whom he was guarantor, the trans- 
 action will be protected under this section (b). 
 
 This section authorizes a mercantile agent to pledge goods 
 in exchange for negotiable securities, which will now, having 
 regard to the eleventh section of the Act, not only include 
 documents, such as notes and bills, which pass by indorsement, 
 but also other documents which are transferable by delivery 
 only. This annuls the effect of an early decision by which 
 East India Company's warrants were held not to be " nego- 
 tiable instruments" within the meaning of the Factors Act, 
 1825, on the ground that they were transferable by delivery 
 and not by indorsement (e). 
 
 There is nothing in the statute which interferes with the 
 common law right of a mercantile agent to pledge securities 
 which are negotiable at common law as distinguished from 
 " documents of title," which are not negotiable except by 
 way of estoppel. A mercantile agent can, at common law, 
 
 (z) Taylor v. Trucman, 1 Moo. & M. 453. 
 
 (a) Sheppard v. Union Ba?ik of London, 7 H. & N. 661. 
 
 \b) Ibid. 
 
 (c) Taylor v. Trueman, 1 Moo. & M. 453.
 
 54 THE FACTORS ACT, 1889. 
 
 pledge negotiable securities belonging to his principal, such as 
 bills of exchange drawn in blank, for an advance made to 
 himself, and the principal will be bound by such a pledge, 
 provided that the pledgee acts bond fide and without notice 
 of the pledgor's want of title (d). 
 
 6. For the purposes of this Act an agreement 
 made with a mercantile agent through a clerk or 
 other person authorized in the ordinary course of 
 business to make contracts of sale or pledge on 
 his behalf shall be deemed to be an agreement 
 with the agent. 
 
 This section re-enacts a clause of the fourth section of the 
 Act of 1842, with the additional proviso that the " clerk or 
 other person" with whom the agreement is made shall be 
 authorized, in the ordinary course of business, to make con- 
 tracts of sale or pledge. At common law a factor or broker 
 has no power to delegate his authority without the assent, 
 express or implied, of his principal — "delegatus non potest dele- 
 gare" (e). But if from the nature of the business, or by the 
 usage of trade, the agent is accustomed to delegate his powers 
 to a sub-agent, it will be inferred that the principal has im- 
 pliedly authorized the delegation, and he will be bound by the 
 contracts made by the sub-agent to the same extent as if they 
 were made by the agent. This section is only a statutory 
 recognition of the common law rule on this point. 
 
 7. — (1.) Where the owner of goods has given 
 possession of the goods to another person for 
 the purpose of consignment or sale, or has 
 shipped the goods in the name of another person, 
 and the consignee of the goods has not had notice 
 that such person is not the owner of the goods, 
 
 (d) See Story on Agency, § 228. The 13th section of the Act expressly 
 preserves the common law powers of the agent. 
 
 (e) Soil;/ v. Rathlone, 2 M. & S. 298 ; Cochrane v. Irlam, 2 M. & S. 301.
 
 TIIE FACTORS ACT, 1880. 55 
 
 tlic consignee shall, in respect of advances made 
 to or for the use of such person, have the same 
 lien on the goods as if such person were the 
 owner of the goods, and may transfer any such 
 lien to another person, 
 
 (2.) Nothing in this section shall limit or affect 
 the validity of any sale, pledge, or disposition, 
 by a mercantile agent. 
 
 This section in effect re-enacts the first section of the Factors 
 Act, 1825, which provided that factors or agents having goods 
 in their possession should be deemed to be the true owners so 
 as to give validity to contracts made with consignees dealing 
 bond fide upon the faith of such property. It only applies as 
 between a consignor of goods and a consignee, and it confers 
 on a consignee, who bond fide makes advances to a consignor 
 without notice that the consignor is not the owner of the 
 goods, the same hen upon the goods as if the ostensible had 
 been the real owner. The owner must have given possession 
 of the goods to the consignor (thereby implying the owner's 
 consent) for the purpose of consignment or sale, or have 
 shipped the goods in the consignor's name. The disjunctive 
 " or" must, it is submitted, be equivalent to the conjunctive 
 "and"; for, unless the goods are shipped in the consignor's 
 name, the consignor is not the ostensible owner. The con- 
 junctive was used in the first section of the Act of 1825. It 
 would appear that the goods must have been shipped for the 
 purpose of sale, and that the addition of the word " con- 
 signment" does not extend the operation of the section 
 beyond the class of consignors for sale (/). The section 
 refers expressly only to advances made, and not also, as was 
 the case in the Factors Act, 1825, to negotiable securities 
 given by the consignee to the consignor. This seems to be 
 an important omission, because it is the custom for a consignee 
 to accept bills of exchange in the consignor's favour against 
 the cargo which is consigned to him. It would probably, 
 
 (/) Sco per Bramwell, L. J., in Johnson v. Credit Lyonnais Co., 3 C. P. 
 D. at p. 44.
 
 56 THE FACTORS ACT, 1889. 
 
 however, be held that the expression "advance" includes a 
 payment made not only in money, but also in a bill of 
 exchange or other negotiable security ; but the Act contains 
 no definition of the term " advance" (see sect. 4 of the Factors 
 Act, 1842). 
 
 As to what constitutes "notice," the reader is referred to 
 the note on the subject under the second section and first sub- 
 section of the Act. The proviso as to notice is possibly in the 
 consignee's favour, since at common law knowledge alone, 
 however acquired, without formal notice of the agency, would 
 prevent the consignee from acquiring a lien over the goods (g) ; 
 at the same time, it is doubtful whether knowledge, as distin- 
 guished from notice, would affect the consignee's rights. 
 
 The effect of the first clause of the section being to confer a 
 lien on a consignee who obtains possession of goods in respect 
 of advances made by him to the consignor, the second clause 
 has for its object to preserve intact the validity of any sale, 
 pledge, or disposition of the goods made by a consignor for 
 sale, who, as such, comes within the statutory definition of a 
 " mercantile agent," as against the claim of a consignee who 
 has made advances to the consignor. Thus, so long as a 
 consignor for sale, who is under advances from the consignee, 
 remains in possession of the goods, he can make a perfectly 
 valid sale or pledge of the goods, and the title of the pur- 
 chaser or pledgee will not be affected by the consignee's 
 claim ; but if the consignee has once obtained possession of 
 the goods his lien will prevail ; for the second section of the 
 Act only gives validity to a disposition made by a mercantile 
 agent who is in possession. 
 
 Dispositions by Sellers and Buyers of Goods. 
 
 8. Where a person, having sold goods, con- 
 tinues, or is, in possession of the goods or of the 
 documents of title to the goods, the delivery or 
 transfer by that person, or by a mercantile agent 
 acting for him, of the goods or documents of 
 title under any sale, pledge, or other disposition 
 
 {(j) See per Lord Blackburn in Mildred v. Maspons, S App. Cas. 885.
 
 THE FACTORS ACT, 1889. 57 
 
 thereof, or under any agreement for sale, pledge, 
 or other disposition thereof, to any person re- 
 ceiving the same in good faith and without notice 
 of the previous sale, shall have the same effect as 
 if the person making the delivery or transfer were 
 expressly authorized by the owner of the goods 
 to make the same. 
 
 The effect of this section is to extend the doctrine of osten- 
 sible ownership to the particular case of a seller who is 
 allowed by a buyer to remain in possession of the goods sold, 
 or of the documents of title thereto. When a seller under 
 these circumstances resells, or pledges, or otherwise disposes 
 of the goods, the title of the person who bona fide, and without 
 notice of the previous sale, receives the goods, or the docu- 
 ments of title relating to them under the resale, pledge, or 
 other disposition, will prevail over the title of the original 
 buyer. 
 
 The case of a seller allowed by a buyer to remain in pos- 
 session of the goods sold was not provided for, either by the 
 common law or by the three earliest Factors Acts. At common 
 law the doctrine of estoppel only applied where the owner of 
 goods had acted so as to clothe the seller with apparent autho- 
 rity to sell or pledge them, and not to a case like the one 
 under consideration, where the owner had only remained 
 passive ; and the Factors Acts only applied to the case of an 
 " agent intrusted with the goods," whereas the seller was 
 not the buyer's agent. The point, however, did not come 
 before the Courts for adjudication until the year 1877. 
 
 In Johnson v. The Credit Lyonnais Co. (A), one H. was a 
 tobacco broker and importer. H. sold tobacco to the plaintiff; 
 the tobacco remaining in bond in H.'s name, and H. retaining 
 in his possession the dock warrants, and being entered in the 
 dock company's books as owner. The plaintiff, not wishing to 
 clear the tobacco out of bond at once, took no steps to have it 
 transferred into his name in the dock company's books. After 
 the sale to the plaintiff, H. fraudulently pledged the goods, and 
 
 {},) 2 C P. D. 224 ; on appeal, 3 C. P. D. 32.
 
 58 THE FACTORS ACT, 1889. 
 
 handed over the warrants to the defendants, who gave notice 
 to the dock company of the change of ownership. It was held 
 that the plaintiff was entitled to recover the tobacco from the 
 defendants, on the grounds (1) that II. was not an agent " in- 
 trusted" with the goods or the documents of title relating to 
 them, so that the pledge made by him was not protected by 
 the Factors Acts, 1825 and 1842 ; and (2) that the plaintiff 
 was not estopped from asserting his title to the tobacco be- 
 cause he had no knowledge of the dealing with his property, 
 which was essential to establish an estoppel. The Court 
 further held that the plaintiff was not estopped by his negli- 
 gence, because he was under no duty to the defendants. This 
 decision caused great alarm among merchants, and the law 
 was immediately amended by the Factors Act, 1877- The 
 Act proceeded on the view that the buyer, in leaving the 
 documents in the possession of the seller, and in omitting to 
 have the goods transferred to his own name, was guilty of 
 negligence, and that, therefore, as between two innocent par- 
 ties, he ought to suffer. 
 
 This section, while substantially re-enacting the third section 
 of the Act of 1877, so far as it altered the law as laid down in 
 Johnson v. The Credit Lyonnais Co., amends the earlier statute 
 in some important particulars: (1.) The Act of 1877 only 
 provided for the case of a seller who continued to be or was 
 in possession of a document of title to goods ; this section 
 extends its operation to the case where the goods are in the 
 seller's possession. There is this important distinction be- 
 tween the two cases : when the goods are represented by a 
 document of title, the buyer who finds it necessary or conve- 
 nient in the course of business to leave the document in the 
 seller's possession, may secure himself against the seller's 
 fraudulently making a subsequent disposition of the goods 
 by having the document specially indorsed to himself, and 
 when the goods are in the possession of a wharfinger or ware- 
 houseman, by having the goods entered in his (the buyer's) 
 name ; while, on the other hand, when the actual goods are 
 left in the seller's possession, it will be necessary for the 
 buyer so to earmark the particular goods sold — c. g., by 
 having them marked with his own name — as to prevent the
 
 THE FACTORS ACT, 1889. 59 
 
 seller from continuing to bo tho ostensible ownor. In somo 
 cases this may be a matter of difficulty, so that the buyer 
 will only be able to protect himself against tho possibility of 
 fraudulent dealing with tho goods by obtaining an immediate 
 delivery of the goods to himself. 
 
 (2.) The Act of 1877 applied, although possibly not in- 
 tended to do so, not only when the second buyer or the pledgee 
 had tho document of title transferred to him, but also when 
 the disposition was made without any transfer of the docu- 
 ment ; so that the person dealing with the seller might even 
 bo ignorant that the document was in the seller's possession. 
 This section gives validity to a disposition only in the case 
 where the goods or the document of title have been actually 
 delivered or transferred to the second buyer or the pledgee. 
 This is an important amendment of the law. There seems to 
 be no reason why the title of the second buyer or the pledgee 
 of the goods, who has not obtained possession of the goods or 
 of the document of title thereto, should be preferred to that 
 of the first buyer ; on the contrary, the maxim " Qui prior est 
 tempore, potior est jure," applies, since neither party has 
 acquired a legal title, and the title of the first buyer ought to 
 be preferred. 
 
 It is important to observe that this section, following the 
 third section of the Factors Act, 1877, applies not only when 
 the seller has been left by tho buyer in possession of the 
 goods or of a document of title, but also when the seller has 
 got possession of them after the sale, the words of the section 
 being when the seller " continues or is in possession." 
 
 With regard to notice, the second buyer or the pledgee may 
 be fixed with notice of the previous sale either — ( 1 ) directly, from 
 communication or from the fact of the goods being marked or 
 otherwise appropriated to the first buyer, or from the evidence 
 of the document of title itself, when the goods are transferred 
 by means of a document ; for the subsequent disposition of the 
 goods will be rendered valid only when the document shows 
 on its face that the goods are deliverable to the seller ; or 
 (2) indirectly, from knowledge of circumstances which would 
 lead a reasonable man of business to the conclusion that a 
 sale of the goods had already taken place (t). 
 
 . ((') Evans v. Trumnan, 1 Moo. & Rob. 10, ante, p. 40.
 
 60 THE FACTORS ACT, 1889. 
 
 9. Where a person, having bought or agreed 
 to buy goods, obtains with the consent of the 
 seller ])ossession of the goods or the documents of 
 title to the goods, the delivery or transfer, by 
 that person or by a mercantile agent acting for 
 him, of the goods or documents of title, under 
 any sale, pledge, or other disposition thereof, or 
 under any agreement for sale, pledge, or other 
 disposition thereof, to any person receiving the 
 same in good faith and without notice of any lien 
 or other right of the original seller in respect of 
 the goods, shall have the same effect as if the 
 person making the delivery or transfer were a 
 mercantile agent in possession of the goods or 
 documents of title with the consent of the owner. 
 
 This section provides for the converse case to that provided 
 for by the preceding section, viz., a buyer allowed by the seller 
 to obtain possession of the goods sold, or of the documents of 
 title relating to them ; and its effect is to give, under these 
 circumstances, the same validity to a sale, pledge, or other 
 disposition of the goods by the buyer, when accompanied by 
 a delivery or transfer of the goods or of the document of title, 
 as the second section of the Act gives to a similar disposition 
 when made by a mercantile agent in possession of the goods 
 with the owner's consent. The person dealing with a buyer 
 so in possession must act bond fide throughout, and have no 
 notice of the existing lien or other right of the original seller 
 in respect of the goods. 
 
 In this class of cases the element of fraud is absent ; the 
 person disposing of the goods is not the ostensible only, but 
 the actual owner of them ; but the original seller may have a 
 lien for the unpaid price, and the section provides, in effect, 
 that the title of a bond fide transferee from the buyer shall 
 prevail over this claim, and that the effect of the transfer 
 shall be to defeat the original vendor's rights. 
 
 It is not necessary, in order that the section should be 
 applicable, that there should be a memorandum of thf
 
 THE FACTORS ACT, 1889. 61 
 
 original contract of sale of the goods, so as to satisfy the 
 Statute of Frauds; it is sufficient that there should be a 
 de facto contract of sale, under which the buyer has obtained 
 from the seller possession of a document of title (I). 
 
 This section differs from the fourth section of the Factors 
 Act, 1877, which it otherwise substantially re-enacts, in two 
 particulars: (1) It applies, as tho last preceding section, to 
 the case of a buyer who obtains possession of the actual 
 goods sold, as well as of a document of title relating to them, 
 whereas the fourth section of the Factors Act, 1877, applied 
 only to the case of a buyer in possession of a document of 
 title. The addition of these words, however, seems to be 
 nugatory, and not to extend the real operation of the sec- 
 tion ; because when the buyer has once obtained possession 
 of the goods, the original seller's rights over them, which 
 exist only until the buyer has obtained actual possession, are 
 lost, so that a transferee from the buyer has no longer any 
 need for the protection which the section affords. (2) The 
 section applies only when there has been a delivery or transfer 
 of the goods, or of a document of title, while the fourth 
 section, if literally read, applied to a sale, pledge, or other 
 disposition of the goods, even when unaccompanied by a 
 transfer of the documents of title relating to them. 
 
 The Factors Acts, previous to the Act of 1877, had not pro- 
 vided for the case of a buyer allowed to have possession of 
 documents of title, and by several decisions given under those 
 Acts it was settled that the words "an agent intrusted with 
 goods or documents of title " did not include a buyer, because 
 he held in his own right and not as agent (m). The singular 
 anomaly thus existed, as was pointed out by Mr. Benjamin in 
 the Treatise on Sale («), that if a merchant, buying goods and 
 paying the price, received a transfer of the dock warrant, he 
 would be safe if his vendor was not owner, but only agent of 
 the assignor of the warrant, and would not be safe if the 
 vendor was owner, because the price might remain unpaid by 
 
 (0 Hugillv. Masker, 22 Q. B. D. 364. 
 
 \m) Jenkyns v. Usborne, 7 M. & G. 678 ; Van Casteel v. Booker, 2 Ex. 
 671 ; Fuentes v. Montis, L. R. 3 C. P. 268. 
 
 (n) Benj. on Sale (4th eel. by the Author and Mr. H. F. Boyd), p. 831.
 
 62 THE FACTOBS ACT, 1889. 
 
 the assignor of the warrant, who would then have a lion upon 
 the goods for the price. This result followed from the differ- 
 ence between the common law and the statutory conception 
 of a " document of title." By the common law, " dock war- 
 rants, warehouse-keepers' certificates, warrants, or orders for 
 the delivery of goods," were regarded as mere "tokens of 
 authority to receive possession," and a transfer of one of these 
 documents did not per se divest the seller's lien, but was in- 
 complete until the buyer had obtained the assent of the ware- 
 houseman or wharfinger to attorn to him. By statute, on the 
 other hand, these documents were treated as "instruments 
 used in the ordinary course of business as proof of the posses- 
 sion or control of goods," and as "authorizing the possessor 
 of such document to transfer goods thereby represented." (See 
 the fourth section of the Factors Act, 1842.) In a word, the 
 Legislature dealt with these documents as being, like a bill 
 of lading, the symbols of the goods which they represent. 
 
 Under the eighth, ninth and tenth sections of this Act these 
 documents will receive the statutory interpretation when trans- 
 ferred by a seller or buyer who is allowed to have possession 
 of them, to a bond fide transferee for value, but they will still 
 receive the common law interpretation in transactions which 
 lie outside the scope of the Factors Act. Thus, e. y., the 
 transfer of one of these documents directly from a seller to a 
 buyer will not, like the transfer of a bill of lading, divest the 
 seller's lien ; in order to effect that, the person in whose cus- 
 tody the goods are must attorn to the buyer, or the latter must 
 take actual possession of the goods {post, p. 68). 
 
 10. Where a document of title to goods has 
 been lawfully transferred to a person as a buyer 
 or owner of the goods, and that person transfers 
 the document to a person who takes the document 
 in good faith and for valuable consideration, the 
 last-mentioned transfer shall have the same effect 
 for defeating any vendor's lien or right of stop- 
 page in transitu as the transfer of a bill of lading
 
 THE FACTORS ACT, 1889. 63 
 
 lias for defeating the right of stoppage in tran- 
 situ. 
 
 "We have already observed that this section seems to include 
 the particular case already provided for by the preceding 
 section, which deals specifically with tho position of a buyer 
 obtaining possession of goods, or of a document of title thereto ; 
 ■while this section contemplates the effect upon the vendor's 
 rights of the transfer of a document of title by a person to 
 whom such document has been lawfully transferred " as buyer 
 or owner." It may be useful to compare the language of the 
 two sections; for although they both apparently contemplate 
 dispositions of goods made under similar circumstances, they 
 appear, upon comparison, to differ in their respective require- 
 ments and effect. The ninth section applies to a buyer who 
 has obtained possession of a document of title (o) with th e 
 seller's consent ; the tenth section applies to a person to whom 
 a document of title has been transferred "as a buyer or 
 owner of the goods." As the section operates solely in 
 defeating an unpaid seller's lienor right of stoppage in transitu, 
 the original transfer must be from a seller to a buyer, or from 
 a quasi-sellev — e.g., a consignor — to a consignee. The con- 
 signor who has bought goods on his own credit, but on his 
 principal's account, is in the same position as a seller quoad 
 his principal, and can exercise a seller's rights ; and it is 
 probable that by a transfer to one " as owner of the goods " 
 the section contemplates this case. The section, therefore, 
 applies to a buyer or consignee who has obtained possession 
 of a document of title from a seller or consignor of the goods 
 (the transfer being effected either by indorsement or mere 
 delivery), so that it includes the particular case provided for 
 by the ninth section, of a buyer obtaining possession of a 
 document of title Avith the seller's consent. 
 
 Let us next consider what each section respectively requires 
 for the validity of a sale, pledge, or disposition made by the 
 person so in possession of a document of title. Under the 
 ninth section the transferee must receive the document "in 
 
 (o) For the purpose of comparison, the case of the buyer's possession 
 of the actual goods, included in the ninth section is omitted.
 
 64 THE FACTORS ACT, 1880. 
 
 good faith, and without notice of any lien or other right 
 (i.e., stoppage in transitu) of the original seller in respect of 
 the goods;" while under the tenth section the transferee must 
 take the document " in good faith and for valuable considera- 
 tion." The ninth section, therefore, contains a proviso as to 
 notice which is not contained in the tenth. Now, it has long 
 been settled that the transfer of a bill of lading will defeat the 
 vendor's lien, although the transferee may have notice that 
 the goods have not been paid for (q), and that a transfer "in 
 good faith" only requires that the transferee is without 
 notice of such circumstances as render the bill of lading not 
 fairly and honestly assignable (>•). It follows, therefore, that 
 whereas under the tenth section, which gives to the transfer 
 of all documents of title the same effect for defeating the 
 vendor's rights as the transfer of a bill of lading formerly had, 
 notice to the transferee that the goods have not been paid for, 
 and, consequently, knowledge on his part of the existence of 
 the unpaid vendor's lien or other right will not invalidate the 
 transaction. On the other hand, under the ninth section, 
 notice of the original vendor's lien or other right will have 
 that effect. Again, since, under the ninth section, the transfer 
 by the buyer is to have the same effect as though he were a 
 mercantile agent under the second section of the Act, the 
 original seller's rights will be totally defeated thereby, whether 
 the transaction be a sale or a pledge ; whereas under the tenth 
 section, as will be shown later, the transfer of a document of 
 title by way of pledge will defeat the unpaid seller's rights in 
 part only, and to the extent necessary in order to give effect to 
 the pledgee's interest. In the absence of any judicial deci- 
 sion upon the effect of the fourth and fifth sections of the 
 Factors Act, 1877, it is impossible to pronounce beforehand 
 upon the intei'pretation which the Courts will place upon the 
 provisions of the ninth and tenth sections of this Act, if and 
 when a case arises for adjudication; and it must suffice here 
 to have called attention to the variance in language, and diffe- 
 rence in effect, of these two sections when seemingly dealing 
 with a precisely similar set of circumstances. 
 
 (q) Cuming v. Brown, 9 East, 506. 
 (r) Salomons v. Nissen, 2 T. R. G81.
 
 TIIE FACTORS ACT, 1889. 65 
 
 The direct object of the section now under consideration is 
 to give to a transfer of any "document of title," as defined by 
 the first section (fourth sub-section) of the Act, when made 
 by a buyer to a bond fide transforee for value from him, the 
 same effect for defeating the original seller's lien or right of 
 stoppage in transitu, as the transfer of a bill of lading has, at 
 common law, for defeating the right of stoppage in transitu. 
 
 Now, at common law, a bill of lading is not negotiable like 
 a bank note or bill of exchange. It is not strictly a document 
 of title at all in the sense that the holder derives his title from 
 the instrument itself, and not from the title of the person from 
 whom he received it. The assignor of a bill of lading must have 
 a title to the goods, or authority to act for one who has. An 
 assignor who is a mere holder of the document, or who has 
 found or stolen it, can transfer no interest to the assignee in 
 the goods represented thereby. It is submitted that the ex- 
 pression "lawfully transferred" in this section, although, 
 perhaps, not altogether free from ambiguity, means that 
 the transferor of any of the so-called "documents of title" 
 must have, as in the case of the transferor of a bill of lading, 
 a title to the goods represented by the document. When this 
 condition was fulfilled, the transfer of a bill of lading had, at 
 common law, the same effect as the actual delivery of the 
 goods, and completely divested the seller's lien. But as be- 
 tween an original seller and a buyer of the goods, the transfer 
 of a bill of lading did not prevent the seller from exercising 
 his right of stoppage in transitu upon the insolvency of the 
 buyer, provided that the goods had not reached the actual 
 possession of the buyer, or that he had not in the meanwhile 
 transferred the bill of lading to a bond fide transferee for 
 value. But it was decided in the great leading case of Lick- 
 barroiv v. Mason (*) that the seller's right of stoppage in transitu 
 was defeated by the buyer's negotiation of the bill of lading 
 with a bond fide indorsee, and the effect of this section is to 
 extend the principle of Lickbarroiv v. Mason (s), which was 
 confined by that case to the transfer of a bill of lading, to the 
 transfer of any document of title as defined by the first section 
 of the Act. 
 
 («) 1 Smith, L. C. (1887). 737. 
 
 P. F
 
 66 THE FACTORS ACT, 1889. 
 
 At common law, in order to defeat the seller's right, the 
 indorsement must be bond fide and for value, and this section 
 confirms the common law by requiring that the transferee 
 shall take the document " in good faith and for valuable con- 
 sideration." By good faith is meant, not without notice that 
 the goods are unpaid for, because a man may be perfectly 
 honest in dealing for goods that he knows not to have been 
 paid for (s), but without knowledge of such circumstances as 
 would make the document of title not fairly and honestly 
 assignable, e. g., knowledge of the insolvency of the vendee or 
 assignee (t). 
 
 " For valuable consideration" will, apparently, include a 
 transfer made in consideration of a pre-existing debt (u). 
 
 When the goods were resold by the buyer, and the bill of 
 lading was transferred on the resale to the second buyer, the 
 effect of the transfer was to destroy the original seller's right 
 of stoppage in transitu ; but when the bill of lading was 
 transferred by way of pledge, the seller's right was defeated 
 in part only, and he was still entitled to any surplus proceeds 
 of the sale of the goods after the pledgee's claim had been 
 satisfied, and he had the further equitable right of insisting 
 upon the pledgee's marshalling the assets (x). 
 
 Now, with reference to the documents enumerated in the 
 first section as "documents of title," we have already stated 
 that, independently of the Factors Acts, the transfer of a 
 delivery order or a dock warrant had no effect beyond that of 
 a mere offer or token of authority to receive possession, and 
 did not, like a bill of lading, actually transfer the possession. 
 "With regard to a delivery order, it was well settled that 
 delivery was not complete until the bailee attorned to the 
 buyer, and became the latter's agent as custodian of the 
 goods (y). It was also settled that the transfer of a delivery 
 order by a buyer to a sub-vendee differed in effect from that 
 
 (s) Cuming v. Brown, 9 East, 506. 
 
 (t) Salomons v. Kissen, 2 T. R. 681 ; Yertue v. Jewell, 4 Camp. 31. 
 
 (i<) Leash v. Scott, 2 Q. B. D. 376, where the Court of Appeal dis- 
 approved of a decision to the contrary by the Privy Council in Rodger v. 
 Ct mptoir d'Hscompte, L. R. 2 P. C. 393 ; 38 L. J. P. C. 30. 
 
 (x) In re Westzinthus, 5 B. & Ad. 817 ; Spald'mg v. finding, 6 Bea. 376 ; 
 Kemp v. Folk, 7 App. Cas. 573. 
 
 (>/) Bentall v. Burn, 3 B. & C. 423.
 
 THE FACTORS ACT, 1889. 67 
 
 of a bill of lading*, and did not affect the original seller's lien, 
 when neither the original buyer nor the sub-vendee had pro- 
 cured the acceptance of the order nor taken actual possession 
 of the goods before the order was countermanded (z). 
 
 Contrasting the effect of a transfer of dock warrants, whar- 
 fingers' receipts, delivery orders, and similar documents with 
 that of a bill of lading, Lord Blackburn remarks that "these 
 documents are generally written contracts, by which the 
 holder of the indorsed document is rendered the person to 
 whom the holder of the goods is to deliver them, and in so far 
 they greatly resemble bills of lading ; but they differ from 
 them in this respect, that when goods are at sea, the pur- 
 chaser who takes the bill of lading has done all that is 
 possible in order to take possession of the goods, as there is a 
 physical obstacle to his seeking out the master of the ship, 
 and requiring him to attorn to his right; but when the goods 
 are on land, there is no reason why the person who receives a 
 delivery order or dock warrant should not at once lodge it 
 with the bailee, and so take actual or constructive possession 
 of the goods. There is, therefore, a very sufficient reason why 
 the custom of merchants should make the transfer of the bill 
 of lading ecpiivalent to an actual delivery of possession, and 
 yet not give such an effect to the transfer of documents of 
 title to goods on shore. Besides this substantial difference 
 between them, there is the more technical one that bills of 
 lading are ancient mercantile documents, which may be sub- 
 ject to the law merchant ; whilst the other class of documents 
 are of modern invention, and no custom of merchants relating 
 to them has ever been established" («). 
 
 With regard to dock warrants and certificates, special juries 
 of London merchants have repeatedly testified that they treated 
 a transfer of these documents as an actual transfer of the pos- 
 session of the goods they represent ; on the other hand, we 
 believe that it has never been the custom of merchants to treat 
 delivery orders in the same way. In the ordinary course of 
 business, a delivery order is presented to the warehouseman 
 
 (a) M'Ewan v. Smith, 2 H. of L. C. 309 ; Griffiths v. Perry, 1 E. & E. 
 
 6S0 ; Farina v. Home, 16 M. & W. 119. 
 (n) Blackburn on Sale (2nd ed.), p. 415. 
 
 f2
 
 68 THE FACTORS ACT, 1889. 
 
 or wharfinger who has the custody of the goods, and exchanged 
 for a warrant ; but the goods having then already reached 
 their destination, the negotiation of the delivery order could 
 have no effect on the seller's right of stoppage in transitu. 
 
 But this section, by extending the effect given at common 
 law to the transfer of a bill of lading to that of any " docu- 
 ment of title," including both a delivery order and a warrant, 
 provides ( 1 ) that on a resale of goods by a buyer or consignee, 
 accompanied by a transfer of a document of title to the sub- 
 purchaser, the original vendor's lien or right of stoppage in 
 transitu will be at once divested without attornment by the 
 warehouseman, wharfinger, or other custodian of the goods ; 
 but (2) that when the buyer or consignee has transferred a 
 document of title by way of pledge, the vendor's lien will, as 
 it is submitted, be divested in fact, and not necessarily in toto, 
 but will exist so far as it is enforceable without prejudice to 
 the pledgee's interest, this being the effect of the transfer of 
 a bill of lading at common law upon the seller's right of 
 stoppage in transitu. 
 
 As between a seller and buyer, the distinction which was 
 drawn at common law between the effect of a transfer of a 
 bill of lading, and of a delivery order, dock warrant, or other 
 like document, remains unaffected by this section, and a 
 transfer of one of the last-mentioned documents will not 
 divest the vendor's lien unless and until the warehouseman, 
 wharfinger, or other custodian of the goods attorns to the 
 buyer, or the latter takes actual possession of the goods. 
 
 We believe that there are no reported decisions in which 
 the corresponding section of the Factors Act, 1877, has been 
 discussed, and which might serve as guides to the judicial 
 construction likely to be placed upon this section. 
 
 It was, indeed, argued, in Kemp v. Folk (b), that cash 
 receipts given by a vendee to a sub-purchaser, upon the pre- 
 sentation of which the latter was entitled to receive goods 
 from the master of the ship, were documents of title equivalent 
 to debvery orders, and that accordingly there was a transfer 
 or delivery of the goods, within the meaning of the fifth 
 section of the Factors Act, 1877, sufficient to defeat the 
 
 (4) 7 App. Cas. 573.
 
 THE FACTORS ACT, 1889. G9 
 
 vendor's right of stoppage in transitu. This contention was 
 at once overruled by Lord Blackburn, who states that he 
 only notices it on account of the great importance attaching to 
 all that relates to the Factors Acts. 
 
 Supplemental. 
 
 11. For the purposes of this Act, the transfer 
 of a document may be by indorsement, or, where 
 the document is by custom or by its express terms 
 transferable by delivery, or makes the goods 
 deliverable to the bearer, then by delivery. 
 
 This section reproduces a clause of the fifth section of the 
 Factors Act, 1877. 
 
 12. — (1.) Nothing in this Act shall authorize an 
 agent to exceed or depart from his authority as 
 between himself and his principal, or exempt him 
 from any liability, civil or criminal, for so doing. 
 
 The object of the Legislature in the Factors Acts is not to 
 authorize an agent to sell or pledge another man's property, 
 or to deviate from the authority he has received from his 
 principal ; the agent, therefore, remains civilly and criminally 
 responsible for any breach of duty committed in the course of 
 his employment. 
 
 The criminal liability of the agent was provided for by the 
 seventh and following sections of the Factors Act, 1825, and 
 by the sixth section of the Factors Act, 1842. 
 
 These provisions are now superseded by the Larceny Act, 
 1861 (24 & 25 Vict. c. 96), the material sections of which will 
 be found in Appendix 2, post, p. 75. 
 
 (2.) Nothing in this Act shall prevent the 
 owner of goods from recovering the goods from 
 an agent or his trustee in bankruptcy at any time
 
 70 THE FACTORS ACT, 1889. 
 
 before the sale or pledge thereof, or shall prevent 
 the owner of goods pledged by an agent from 
 having the right to redeem the goods at any time 
 before the sale thereof, on satisfying the claim for 
 which the goods were pledged, and paying to the 
 agent, if by him required, any money in respect 
 of which the agent would by law be entitled to 
 retain the goods or the documents of title thereto, 
 or any of them, by way of lien as against the 
 owner, or from recovering from any person with 
 whom the goods have been pledged any balance 
 of money remaining in his hands as the produce 
 of the sale of the goods after deducting the 
 amount of his lien. 
 
 (3.) Nothing in this Act shall prevent the 
 owner of goods sold by an agent from recovering 
 from the buyer the price agreed to be paid for the 
 same, or any part of that price, subject to any 
 right of set off on the part of the buyer against 
 the agent. 
 
 These clauses reproduce the seventh section of the Factors 
 Act, 1842 (with which compare the sixth section of the Factors 
 Act, 1825). 
 
 They preserve the right of the real owner of goods under 
 the following circumstances : — 
 
 1. Before a sale or pledge by the agent. — The owner may 
 recover the goods from the agent or his trustee in bank- 
 ruptcy (c). 
 
 2. After a pledge by the agent, and before a sale by the 
 pledgee. — The owner may redeem the goods subject to his 
 satisfying (i) the claim of the pledgee, and (ii) the claim, if 
 
 (c) A factor being regarded as a trustee of property in his hands as 
 factor, such property does not pass to his trustee in bankruptcy : Cope- 
 man v. Gallant, 1 P. Wms. 314.
 
 1889. 71 
 
 any, of tlio agent (<"•//., in respect of advances made or nego- 
 tiable instruments given to his principal), and in respect of 
 which the agent would be entitled to a lien on the goods or 
 the documents of title thereto. 
 
 3. After a sale by the pledgee. — The owner may recover 
 from the pledgee the balance of the proceeds of sale after 
 deducting tho amount of the pledgee's lien (d ). 
 
 4. After a sale by the agent. — The owner may recover from 
 the buyer the price agreed to bo paid, or any part thereof, 
 subject to any right of set-off which the buyer may have against 
 the agent. With regard to the right of set-off, if the agent sells 
 or consigns goods for an undisclosed principal, the buyer or 
 consignee may set off any demand he may have against the 
 agent against the demand made for the goods by the prin- 
 cipal, and such set-off, to be available, need not exist at the 
 time of the sale, but may arise at any time before the dis- 
 closure of the actual principal {e). But it is ecpially well 
 settled that this rule does not apply if the person dealing with 
 the agent knows him to have a principal, although the name 
 of the principal may not be disclosed ; and it is immaterial 
 whether the principal carries on business in this country or 
 abroad (/). 
 
 Although there is no privity of contract between the 
 foreign principal and persons dealing with the principal's 
 commission-agent in this country (g), the foreign principal has 
 the same right as a principal residing in this country to 
 recover goods, or their proceeds, under this section, and may 
 maintain an action for that purpose, his right depending, not 
 on agency, nor on privity of contract, but upon property (A). 
 
 13. The provisions of this Act shall be con- 
 strued in amplification and not in derogation 
 
 (d) As to the owner's right to marshal securities, see Ex parte Alston, 
 4 Ch. App. 168. 
 
 (r) George v. Clagett, 7 T. E. 359; 2 Sm. L. C. (1887), p. 130, citing 
 Babone v. Williams. 
 
 (/) Semcnzav. Brinslcg, 18 C. B. (N. S.) 4G7 ; Mildred v. Maspons, 9 
 Q. B. D. 874 ; confirmed by the H. L. 8 App. Cas. 874. 
 
 (<?) Per Lord Blackburn in Armstrong v. Stokes, L. R. 7 Q. B. at p. G05. 
 
 (A) Mildred v. Maspons, 8 App. Cas. 874.
 
 72 THE FACTOKS ACT, 1889. 
 
 of the powers exerciseable by an agent inde- 
 pendently of this Act. 
 
 14. The enactments mentioned in the schedule 
 to this Act are hereby repealed as from the com- 
 mencement of this Act, but this repeal shall not 
 affect any right acquired or liability incurred 
 before the commencement of this Act under any 
 enactment hereby repealed. 
 
 This section repeals the Factors Acts, 1823 to 1877, but the 
 repeal is not to have a retrospective operation. 
 
 15. This Act shall commence and come into 
 operation on the first day of January, 1890. 
 
 16. This Act shall not extend to Scotland. 
 
 This section was not included in the original bill, but 
 was added as an amendment in Committee of the House of 
 Commons. 
 
 There was some doubt whether the previous Factors Acts 
 applied to Scotland (i). The point was raised on the pleadings 
 in the Scotch cases of M'Ewan v. Smith (j), and Pochin v. 
 Robinow (k), but the Courts avoided the question. By the 
 law of Scotland, as we have already pointed out, the possession 
 of moveables constitutes title ; and it is doubtful if the Factors 
 Acts, in the view taken of them by English judges, as not 
 interfering with the doctrine of apparent ownership, but only 
 investing a special class of agents with a statutory authority, 
 would, even if applicable, have modified the existing law of 
 Scotland (I). 
 
 17. This Act may be cited as the Factors Act, 
 1889. 
 
 (i) Notice the reference in the 7th section of the Factors Act, 1825, to 
 "any part of the United Kingdom. " 
 
 (j) 2 H. & C. 309. 
 
 (/,•) 7Macph. 622 (1869). 
 
 (I) The question is fully discussed in Bell's Commentaries on the Law 
 of Scotland, Vol. I. (7th ed.) p. 517.
 
 APPENDIX No. 1. 
 
 1. LAW OF FEANCE— CODE NAPOLEON. 
 
 Article 2279. 
 
 In the case of moveables, possession is equivalent to a title 
 ^possession vaut titre). 
 
 Nevertheless, the party who has lost anything, or from 
 whom it has been stolen, may reclaim it, within three years 
 from the day of the loss or robbery, against the party in 
 whose hands he finds it ; saving to the latter his remedy 
 against the person from whom he obtained it. 
 
 Article 2280. 
 
 If the actual possessor of the thing stolen, or lost, has 
 purchased it in a fair or market, or at a public sale, or from 
 a shopkeeper (a) dealing in similar articles, the original owner 
 can only have it restored to him on repaying the possessor the 
 price which it cost him. 
 
 2. LAW OF GEEMANY— ALLGEMEINES DEUTSCHES 
 HANDELSGESETZBUCH (GEEMAN GENEEAL 
 COMMEECIAL CODE). 
 
 Article 306. 
 
 Sale. — If goods or other moveables are disposed of and 
 transferred by a trader (Kaufmann) (b), in the course of his 
 
 (a) Marchand — not a merchant in the English sense of the term, for 
 which the French is commercant. 
 
 (b) Art. 4 of the Code : " ' Trader ' (Kaufmann), in this code, means a 
 person who carries on husiness in manner customary in his particular 
 trade."
 
 74 APPENDIX NO. I. 
 
 business, a bond fide transferee acquires the ownership there- 
 of, even where the transferor was not owner. Ownership 
 based on a prior title is extinguished. Every prior right 
 of pledge or other right in rem is extinguished, if it was un- 
 known to the transferee at the time of transfer. 
 
 Pledge. — If goods or other moveables are pledged and trans- 
 ferred by a trader in the course of his business, all rights of 
 ownership, rights of pledge, or other rights in rem founded on 
 prior title, cannot be enforced to the disadvantage of the bond 
 fide (redlich) pledgee or his successor in title. 
 
 The right of lien by law given to commission agents, for- 
 warding agents, and carriers, is of equal force to a right of 
 pledge acquired by contract. 
 
 This article does not apply if the goods were stolen or lost. 
 
 Article 307. 
 
 The provisions of the last preceding article apply to securi- 
 ties (Papiere) negotiable to bearer, even where the transfer or 
 pledge is not made by a trader in the course of his business, 
 and where the securities (Papiere) were stolen or lost. 
 
 Article 308. 
 
 Local enactments (Landesgesetze) (c), which contain provi- 
 sions still more favourable to the possessor, are not affected 
 by the two last preceding articles. 
 
 Article 309. 
 
 The formalities prescribed by the Municipal Code for validly 
 effecting a mortgage are not necessary where the mutual deal- 
 ings of traders call for a pledge of moveables, securities to 
 bearer, or securities negotiable by indorsement. 
 
 In such case, in addition to the simple agreement to pledge, 
 it is sufficient : — 
 
 (1) In the case of moveables and securities to bearer, to 
 
 transfer possession to the creditor in manner pre- 
 scribed by the Municipal Code for a mortgage 
 (thereof) ; 
 
 (2) In the case of securities negotiable by indorsement, to 
 
 hand over the security indorsed. 
 
 (c) This word means the laws of any of the various States federated 
 under Imperial rule.
 
 APPENDIX No. 2. 
 
 LAECENY ACT, 1861. 
 24 & 25 Vict. c. 96. 
 
 TnE following sections of the Act deal with misappropriation 
 by factors or agents : — 
 
 Sect. 78. "Whosoever, being a factor or agent intrusted, 
 either solely or jointly with any other person, for the pur- 
 pose of sale or otherwise, with the possession of any goods, 
 or of any document of title («) to goods, shall, contrary to or 
 without the authority of his principal in that behalf, for his 
 own use or benefit, or the use or benefit of any person other 
 than the person by whom he was so intrusted, and in viola- 
 tion of good faith, make any consignment, deposit, transfer, 
 or delivery of any goods or document of title so intrusted to 
 him as in this section before mentioned, as and by way of a 
 pledge, hen, or security for any money or valuable security 
 borrowed or received by such factor or agent at or before the 
 time of making such consignment, deposit, transfer, or delivery, 
 or intended to be thereafter borrowed or received, or shall, 
 contrary to or without such authority, for his own use or 
 benefit, or the use or benefit of any person other than the 
 person by whom he was so intrusted, and in violation of 
 good faith, accept any advance of any money or valuable 
 security on the faith of any contract or agreement to consign, 
 deposit, transfer, or deliver any such goods or document of 
 title, shall be guilty of a misdemeanor, and being convicted 
 thereto shall be liable, at the discretion of the Court, to any 
 
 (a) Document of title is, by section 1 of the Act, defined to include 
 "any bill of lading, India warrant, dock warrant, warehouse-keeper's 
 certificate, warrant or order for delivery or transfer of any goods or 
 valuable thing, bought and sold note, or any other document used in the 
 ordinary course of business as proof of the possession or control of 
 goods, or authorizing or purporting to authorize, either by indorsement 
 or by delivery, the possessor of such document to transfer or receive 
 any goods thereby represented or therein mentioned or referred <o." 
 This definition closely corresponds with that given in the first section of 
 the Factors Act, with which it should be compared. The italicised 
 portions are omitted in the Factors Act.
 
 76 APPENDIX NO. U. 
 
 of the punishments which the Court may award as herein- 
 before last mentioned ; and every clerk or other person who 
 shall knowingly and wilfully act and assist in making any 
 such consignment, deposit, transfer, or delivery, or in accepting 
 or procuring such advance as aforesaid, shall be guilty of a 
 misdemeanor, and being convicted thereof shall be liable, at 
 the discretion of the Court, to any of the same punishments : 
 Provided, that no such factor or agent shall be liable to any 
 prosecution for consigning, depositing, transferring, or de- 
 livering any such goods or documents of title, in case the 
 same shall not be made a security for or subject to the pay- 
 ment of any greater sum of money than the amount which at 
 the time of such consignment, deposit, transfer, or delivery 
 was justly due and owing to such agent from his principal, 
 together with the amount of any bill of exchange drawn by 
 or on account of such principal, and accepted by such factor 
 or agent (b). 
 
 Sect. 79. Any factor or agent intrusted as aforesaid, and 
 possessed of any such document of title, whether derived 
 immediately from the owner of such goods or obtained by 
 reason of such factor or agent having been intrusted with the 
 possession of the goods or of any other document of title there- 
 to, shall be deemed to have been intrusted with the possession 
 of the goods represented by such document of title ; and every 
 contract pledging or giving a lien upon such document of title 
 as aforesaid shall be deemed to be a pledge of and lien upon 
 the goods to which the same relates ; and such factor or agent 
 shall be deemed to be possessed of such goods or document, 
 whether the same shall be in his actual custody, or shall 
 be held by any other person subject to his control, or for him, 
 or on his behalf ; and where any loan or advance shall be 
 bond fide made to any factor or agent intrusted with and in 
 possession of any such goods or documents of title, on the 
 faith of any contract or agreement in writing to consign, 
 deposit, transfer or deliver such goods or document of title, 
 and such goods or document of title shall actually be received 
 by the person making such loan or advance, without notice 
 that such factor or agent was not authorized to make such 
 pledge or security, every such loan or advance shall be deemed 
 to be a loan or advance on the security of such goods or 
 document of title within the meaning of the last preceding 
 section, though such goods or document of title shall not 
 actually be received by the person making such loan or 
 advance till the period subsequent thereto ; and any contract 
 or agreement, whether made direct with such factor or agent, 
 
 (b) As to the factor's right to add to his lien the amount covered by 
 unmatured acceptances, see ante, p. 46.
 
 LARCENY ACT, 1861. 77 
 
 or with any cleidt or other person on his behalf, shall bo 
 deemed a contract or agi-eement with such factor or agent ; 
 and any payment made, whether by money or bill of exchange 
 or other negotiable security, shall be deemed to be an advance 
 within the meaning of the last preceding section ; and a factor 
 or agent in possession as aforesaid of such goods or document 
 shall be taken for the purposes of the last preceding section 
 to have been intrusted therewith by the owner thereof, unless 
 the contrary be shown in evidence (c). 
 
 Sect. 85. Nothing in any of the last ten preceding sections 
 of this Act contained shall enable or entitle any person to 
 refuse [to make a full and complete discoveiy by answer to 
 any bill in equity, or] to answer any question or interrogatory 
 in any civil proceeding in any Court, or upon the hearing of 
 any matter in bankruptcy or insolvency ; and no person shall 
 be liable to be convicted of any of the misdemeanors in any 
 of the said sections mentioned by any evidence whatever in 
 respect of any act done by him, if he shall at any time pre- 
 viously to his being charged with such offence have first 
 disclosed such act on oath, in consequence of any compulsory 
 process of any Court of law or equity, in any action, suit, or 
 proceeding which shall have been bond fide instituted by any 
 party aggrieved, or if he shall have first disclosed the same 
 in any compulsory examination or deposition before any 
 Court upon the hearing of any matter in bankruptcy or 
 insolvency (d). 
 
 Sect. 86. Nothing in any of the last eleven preceding 
 sections of this Act contained, nor any proceeding, conviction 
 or judgment to be bad or taken thereon against any person 
 under any of the said sections, shall prevent, lessen or impeach 
 any remedy at law or in equity which any party aggrieved by 
 any offence against any of the said sections might have had if 
 this Act had not been passed ; but no conviction of any such 
 offender shall be received in evidence in any action at law or 
 [suit] in equity against him ; and nothing in the said sections 
 contained shall affect or prejudice any agreement entered into 
 or security given by any trustee, having for its object the 
 restoration or payment of any trust property misappropriated. 
 
 Sect. 87. No misdemeanor against any of the last twelve 
 preceding sections of this Act shall be prosecuted or tried at 
 any Court of general or quarter sessions of the peace. 
 
 (c) This section is copied almost verbatim from the fourth section of 
 the Factors Act, 1842. 
 
 (rf) See R. v. Sheen, Bell's C. C. 97.
 
 APPENDIX No. 3. 
 
 THE EACTOES ACTS, 1823—1877. 
 (Noio Repealed by the Factors Act, 1889.) 
 
 4 Geo. 4, c. 83. 
 
 An Act for the better Protection of the Property of Merchants 
 and others, loho may hereafter enter into Contracts or 
 Ayreements in relation to Goods, Wares, or Merchandizes 
 intrusted to Factors or Ayents. [18th. July, 1823.] 
 
 "Whereas it has heen found that the law, as it now 
 stands, relating to goods shipped in the names of persons who 
 are not the actual proprietors thereof, and to the deposit or 
 pledge of goods, affords great facility to fraud, produces 
 frequent litigation, and proves, in its effects, highly injurious 
 to the interests of commerce in general ; " be it therefore 
 enacted by the King's most excellent Majesty, by and with the 
 advice and consent of the Lords spiritual and temporal, and 
 Commons in this present Earliament assembled, and by the 
 authority of the same, that from and after the passing of 
 this Act, any person or persons intrusted, for the purpose of 
 sale, with any goods, wares, or merchandize, and by whom 
 such goods, wares, or merchandize shall be shipped, in his, 
 her, or their own name or names, or in whose name or names 
 any goods, wares, or merchandize, shall be shipped by any 
 other person or persons, shall be deemed and taken to be the 
 true owner or owners thereof, so far as to entitle the consignee 
 or consignees of such goods, wares, or merchandize to a lien 
 thereon, in respect of any money or negotiable security or 
 securities advanced or given by such consignee or consignees, 
 to or for the use of the person or persons in whose name or 
 names such goods, wares, or merchandize shall be shipped, or 
 in respect of any money or negotiable security or securities 
 received by him, her, or them to the use of such consignee or 
 consignees, in the like manner to all intents and purposes as 
 if such person or persons was or were the true owner or 
 owners of such goods, wares, and merchandize ; provided
 
 the factors acts, 1823 — 1877. 79 
 
 such consignee or consignees shall not have notice, by the bill 
 of lading for the delivery of such goods, wares, or merchan- 
 dize, or otherwise, at or before tho timo of any advance of such 
 money or negotiable security, or of such receipt of money or 
 negotiable security, in respect of which such lien is claimed, 
 that such person or persons so shipping in his, her, or their 
 own name or names, or in whose name or names any goods, 
 wares, or merchandize shall be shipped by any person or 
 persons, is or are not the actual and bond fide owner or 
 owners, proprietor or proprietors of such goods, wares, and 
 merchandize so shipped as aforesaid, any law, usage, or 
 custom to the contrary thereof in any wise notwithstanding : 
 provided also, that the person or persons in whose name or 
 names any such goods, wares, or merchandize are so shipped 
 as aforesaid, shall be taken for the purposes of this Act to 
 have been intrusted therewith, unless the contrary thereof 
 shall appear or be shown in evidence by any person disputing 
 such fact. 
 
 2. And be it further enacted, that it shall be lawful to and 
 for any person or persons, body or bodies politic or corporate, 
 to accept and take any goods, wares, or merchandize, or the 
 bill or bills of lading for the delivery thereof, in deposit or 
 pledge, from any consignee or consignees thereof ; but then 
 and in that case such person or persons, body or bodies politic 
 or corporate, shall acquire no further or other right, title, or 
 interest, in or upon or to the said goods, wares, or merchan- 
 dize, or any bill of lading for the delivery thereof, than was 
 possessed, or could or might have been enforced by the said 
 consignee or consignees at the time of such deposit or pledge 
 as a securit3 r as aforesaid ; but such person or persons, body 
 or bodies politic or corporate, shall and may acquire, possess 
 and enforce such right, title, or interest as was possessed, and 
 might have been enforced, by such consignee or consignees, 
 at the time of such deposit or pledge as aforesaid ; any rule 
 of law, usage or custom to the contrary notwithstanding. 
 
 3. Provided always, that nothing herein contained shall 
 be deemed, construed, or taken to deprive or prevent the true 
 owner or owners, proprietor or proprietors of such goods, 
 wares, or merchandize, from demanding and recovering the 
 same from his, her, or their factor or factors, agent or agents, 
 before the same shall have been so deposited or pledged, or 
 from the assignee or assignees of such factor or factors, agent 
 or agents, in the event of his, her, or their bankruptcy ; nor 
 to prevent any such owner or owners, proprietor or proprietors, 
 from demanding or recovering of and from any person or 
 persons, or of or from the assignees of any person or persons 
 in case of his or her bankruptcy, or of or from any 
 body or bodies politic or corporate, such goods, wares, or
 
 80 APPENDIX NO. III. 
 
 merchandize, so consigned, deposited or pledged, upon re- 
 payment of the money, or on restoration of the negotiable 
 security or securities, or on payment of a sum of money 
 equal to the amount of such security or securities, for 
 which money or negotiable security or securities such person 
 or persons, his, her, or their assignee or assignees, or 
 such body or bodies politic or corporate, may be entitled 
 to any lien upon such goods, wares, or merchandize ; 
 nor to prevent the said owner or owners, proprietor or pro- 
 prietors, from recovering of and from such person or persons, 
 body or bodies politic or corporate, any balance or sum of 
 money remaining in his, her, or their hands, as the produce of 
 the sale of such goods, wares, or merchandize, after deducting 
 thereout the amount of the money or negotiable security or 
 securities so advanced or given upon the security thereof as 
 aforesaid : provided always, that in case of the bankruptcy of 
 such factor or agent, the owner of the goods so pledged and 
 redeemed as aforesaid shall be held to have discharged pro 
 tanto the debt due by him to the bankrupt's estate. 
 
 6 Geo. 4, c. 94. 
 
 An Act to alter and amend an Act for the better Protection of 
 the Property of Merchants and others, who may hereafter 
 enter into Contracts or Agreements in relation to Goods, 
 Wares, or Merchandize intrusted to Factors or Agents. 
 
 [5th July, 1825.] 
 
 " Whereas an Act passed in the fourth year of the reign of 
 his present Majesty, intituled ' An Act for the better Pro- 
 tection of the Property of Merchants and others who may 
 hereafter enter into Contracts or Agreements in relation to 
 Goods, Wares, or Merchandize intrusted to Factors or Agents ' : 
 and whereas it is expedient to alter and amend the said Act, 
 and to make further provisions in relation to such contracts or 
 agreements as hereinafter provided:" be it therefore enacted 
 by the King's most excellent Majesty, by and with the advice 
 and consent of the Lords spiritual and temporal, and Com- 
 mons, in this present Parliament assembled, and by the autho- 
 rity of the same, that from and after the passing of this Act, 
 any person or persons intrusted, for the purpose of consign- 
 ment or of sale, with any goods, wares, or merchandize, and 
 who shall have shipped such goods, wares, or merchandize in 
 his, her, or their own name or names, and any person or 
 persons in whose name or names any goods, wares, or mer-
 
 THE FACTORS ACTS, 1823 — 1877. 81 
 
 chandizo shall be shipped by auy othor person or persons, 
 shall be deemed and taken to be the true owner or owners 
 thereof, so far as to entitle the consignee or consignees of such 
 goods, wares, and merchandize to a lien thereon, in respect 
 of any money or negotiable security or securities advanced or 
 given by such consignee or consignees, to or for the use of the 
 person or persons in whose name or names such goods, wares, 
 or merchandize shall be shipped, or in respect of any money 
 or negotiable security or securities received by him, her, or 
 them, to the use of such consignee or consignees, in the like 
 manner to all intents and purposes as if such person or per- 
 sons was or were the true owner or owners of such goods, 
 wares, and merchandize : provided such consignee or con- 
 signees shall not have notice by the bill of lading for the 
 delivery of such goods, wares, or merchandize, or otherwise, 
 at or before the time of any advance of such money or nego- 
 tiable seecurity, or of such receipt of money or negotiable 
 security in respect of which such lien is claimed, that such 
 person or persons so shipping in his, her, or their own name 
 or names, or in whose name or names any goods, wares, or 
 merchandize shall be shipped by any person or persons, is or 
 are not the actual and bond fide owner or owners, proprietor or 
 proprietors of such goods, wares, and merchandize so shipped 
 as aforesaid, any law, usage, or custom to the contrary thereof 
 in any wise notwithstanding : provided also, that the person 
 or persons in whose name or names any such goods, wares, or 
 merchandize are so shipped as aforesaid, shall be taken, for 
 the purposes of this Act, to have been intrusted therewith for 
 the purpose of consignment or of sale, unless the contrary 
 thereof shall be made to appear by bill of discovery or other- 
 wise, or be made to appear, or be shown in evidence by any 
 person disputing such fact. 
 
 2. And be it further enacted, that from and after the first 
 day of October one thousand eight hundred and twenty-sis, 
 any person or persons intrusted with 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, shall be deemed and taken to be the 
 true owner or owners of the goods, wares, and merchandize 
 described and mentioned in the said several documents herein- 
 before stated respectively, or either of them, so far as to give 
 validity to any contract or agreement thereafter to be made 
 or entered into by such person or persons so intrusted and in 
 possession as aforesaid, with any person or persons, body or 
 bodies politic or corporate, for the sale or disposition of the 
 said goods, wares, and merchandize, or any part thereof, or 
 for the deposit or pledge thereof or any part thereof, as a 
 security for any money or negotiable instrument or instru- 
 
 P. G
 
 82 APPENDIX NO. III. 
 
 ments advanced or given by such person or persons, body or 
 bodies politic or corporate, upon the faith of such several 
 documents or either of them : provided such person or persons, 
 body or bodies politic or corporate, shall not have notice by 
 such documents or either of them or otherwise, that such 
 person or persons so intrusted as aforesaid is or are not the 
 actual and bond fide owner or owners, proprietor or proprietors 
 of such goods, wares, or merchandize so sold or deposited or 
 pledged as aforesaid ; any law, usage, or custom to the con- 
 trary thereof in any wise notwithstanding. 
 
 3. Provided always, and be it further enacted, that in case 
 any person or persons, body or bodies politic or corporate, 
 shall, after the passing of this Act, accept and take any such 
 goods, wares, or merchandize in deposit or pledge fi'om any 
 such person or persons so in possession and intrusted as afore- 
 said, without notice as aforesaid, as a secm-ity for any debt 
 or demand due and owing from such person or persons so 
 intrusted and in possession as aforesaid, to such person or 
 persons, body or bodies politic or corporate, before the time 
 of such deposit or pledge, then and in that case such person 
 or persons, body or bodies politic or corporate so accepting or 
 taking such goods, wares, or merchandize in deposit or pledge, 
 shall acquire no further or other right, title, or interest in or 
 upon, or to the said goods, wares, or merchandize, or any such 
 document as aforesaid, than was possessed or could or might 
 have been enforced by the said person or persons so possessed 
 and intrusted as aforesaid at the time of such deposit or 
 pledge as a security as last aforesaid ; but such person or 
 persons, body or bodies politic or corporate, so accepting or 
 taking such goods, wares or merchandize in deposit or pledge, 
 shall and may acquire, possess and enforce such right, title or 
 interest as was possessed and might have been enforced by 
 such person or persons so possessed and intrusted as aforesaid ; 
 any rule of law, usage or custom to the contrary notwith- 
 standing. 
 
 4. And be it further enacted, that from and after the first 
 day of October one thousand eight hundred and twenty-six, it 
 shall be lawful to and for any person or persons, body or 
 bodies politic or corporate, to contract with any agent or 
 agents, intrusted with any goods, wares or merchandize, or to 
 whom the same may be consigned, for the purchase of any 
 such goods, wares, and merchandize, and to receive the same 
 of and pay for the same to such agent or agents ; and such 
 contract and payment shall be binding upon and good against 
 the owner of such goods, wares, and merchandize notwith- 
 standing such person or persons, body or bodies politic or 
 corporate, shall have notice that the person or persons making 
 and entering into such contract, or on whose behalf such con-
 
 THE FACTORS ACTS, 1823 — 1877. 83 
 
 tract is made or entered into, is an agent or agents : provided 
 such contract and payment be made in the usual and ordinary 
 course of business, and that such person or persons, body or 
 bodies politic or corporate shall not, when such contract is 
 entered into or payment made, have notice that such agent or 
 agents is or are not authorized to sell the said goods, wares, 
 and merchandize, or to receive the said purchase-money. 
 
 5. And be it further enacted, that from and after the 
 passing of this Act, it shall be lawful to and for any person or 
 persons, body or bodies politic or corporate, to accept and take 
 any such goods, wares, or merchandize, or any such document 
 as aforesaid, in deposit or pledge from any such factor or 
 factors, agent or agents, notwithstanding such person or per- 
 sons, body or bodies politic or corporate, shall have such 
 notice as aforesaid, that the person or persons making such 
 deposit or pledge is or are a factor or factors, agent or agents ; 
 but then and in that case such person or persons, body or 
 bodies politic or corporate, shall acquire no further or other 
 right, title, or interest in or upon or to the said goods, wares, 
 or merchandize, or on any such document as aforesaid, for the 
 delivery thereof, than was possessed or could or might have 
 been enforced by the said factor or factors, agent or agents, 
 at the time of such deposit or pledge as a security as last 
 aforesaid ; but such person or persons, body or bodies politic 
 or corporate, shall and may acquire, possess and enforce such 
 right, title, or interest as was possessed and might have been 
 enforced by such factor or factors, agent or agents, at the 
 time of such deposit or pledge as aforesaid ; any rule of law, 
 usage or custom to the contrary notwithstanding. 
 
 6. Provided always, and be it enacted, that nothing herein 
 contained shall be deemed, construed, or taken to deprive 
 or prevent the true owner or owners, or proprietor or pro- 
 prietors, of such goods, wares, or merchandize, from demand- 
 ing and recovering the same from his, her, or their factor 
 or factors, agent or agents, before the same shall have been so 
 sold, deposited, or pledged, or from the assignee or assignees 
 of such factor or factors, agent or agents, in the event of his, 
 her, or their bankruptcy ; nor to prevent such owner or 
 owners, proprietor or proprietors, from demanding or recover- 
 ing of and from any person or persons, body or bodies politic 
 or corporate, the price or sum agreed to be paid for the pur- 
 chase of such goods, wares, or merchandize, subject to any 
 right of set-off on the part of such person or persons, body or 
 bodies politic or corporate, against such factor or factors, 
 agent or agents ; nor to prevent such owner or owners, pro- 
 prietor or proprietors, from demanding or recovering of and 
 from such person or persons, body or bodies politic or cor- 
 porate, such goods, wares, or merchandize so deposited or 
 
 g2
 
 84 APPENDIX NO. III. 
 
 pledged, upon repayment of the money, or on restoration of 
 the negotiable instrument or instruments so advanced or given 
 on the security of such goods, wares, or merchandize as afore- 
 said, by such person or persons, body or bodies politic or 
 corporate to such factor or factors, agent or agents ; and upon 
 payment of such further sum of money, or on restoration of 
 such other negotiable instrument or instruments (if any) as 
 may have been advanced or given by such factor or factors, 
 agent or agents, to such owner or owners, proprietor or pro- 
 prietors, or on payment of a sum of money equal to the 
 amount of such instrument or instruments ; nor to prevent the 
 said owner or owners, proprietor or proprietors, from recover- 
 ing of and from such person or persons, body or bodies politic 
 or corporate, any balance or sum of money remaining in his, 
 her, or their hands, as the produce of the sale of such goods, 
 wares, or merchandize, after deducting thereout the amount 
 of the money or negotiable instrument or instruments so 
 advanced or given upon the security thereof as aforesaid : 
 provided always, that in case of the bankruptcy of any such 
 factor or agent, the owner or owners, proprietor or proprietors 
 of the goods, wares, and merchandize so pledged and redeemed 
 as aforesaid, shall be held to have discharged pro tanto the 
 debt due by him, her, or them to the estate of such bankrupt. 
 \_The remaining sections of this Act {i.e., ss. 7 — 10) are noiv 
 superseded by the 24 8f 25 Vict. c. 96, ss. 78—79, 85, 86; for 
 which see Appendix, No. 2, ante p. 75.] 
 
 5 & 6 Vict. c. 39. 
 
 An Act to amend the Laxo relating to Advances bona fide made 
 to Agents intrusted with Goods. 
 
 [30th June, 1842.] 
 
 " "VVnEREAS by an Act passed in the sixth year of the reign 
 of his late majesty King George the Fourth, intituled ' An 
 Act to alter and amend an Act for the better Protection of the 
 Property of Merchants and others ivho may hereafter enter into 
 Contracts or Agreements in relation to Goods, Wares and Mer- 
 chandize intrusted to Factors or Agents ; ' validity is given, 
 under certain circumstances, to contracts or agreements made 
 with persons intrusted with and in possession of the docu- 
 ments of title to goods and merchandize, and consignees 
 making advances to persons abroad who are intrusted with 
 any goods or merchandize are entitled, under certain circum-
 
 the factors acts, 1823 — 1877. 85 
 
 stances, to a lien thereon, bnt under tlio said Act and the pre- 
 sent state of the law advances cannot safely be made upon 
 goods or documents to persons known to have possession 
 thereof as agents only : And whereas by the said Act it is 
 amongst other things further enacted, ' that it shall be lawful 
 to and for any person to contract with any agent intrusted 
 with any goods, or to whom the same may bo consigned, for 
 the purchase of any such goods, and to receive the same of 
 and to pay for the same to such agent, and such contract and 
 payment shall be binding upon and good against the owner of 
 Buch goods, notwithstanding such person shall have notice 
 that the person making such contract, or on whose behalf 
 such contract is made, is an agent ; provided such contract or 
 payment be made in the usual and ordinary course of business, 
 and that such person shall not, when such contract is entered 
 into or payment made, have notice that such agent is not 
 authorized to sell the same, or to receive the said purchase- 
 money ; ' And whereas advances on the security of goods and 
 merchandize have become an usual and ordinary course of 
 business, and it is expedient and necessary that reasonable 
 and safe facilities should be afforded thereto, and that the 
 same protection and validity should be extended to bond fide 
 advances upon goods and merchandize, as by the said recited 
 Act is given to sales, and that owners intrusting agents with 
 the possession of goods and merchandize, or of documents of 
 title thereto, should in all cases where such owners by the 
 said recited Act, or otherwise, would be bound by a contract 
 or agreement of sale, be in like manner bound by any contract 
 or agreement of pledge or lien for any advances bond fide 
 made on the security thereof : And whereas much litigation 
 has arisen on the construction of the said recited Act, and the 
 same does not extend to protect exchanges of securities bond 
 fide made, and so much uncertainty exists in respect thereof 
 that it is expedient to alter and amend the same, and to extend 
 the provisions thereof, and to put the law on a clear and 
 certain basis : " be it therefore enacted by the Queen's most 
 excellent Majesty, by and with the advice and consent of the 
 Lords Spiritual and Temporal, and Commons, in this present 
 parliament assembled, and by the authority of the same, 
 That from and after the passing of this Act any agent who 
 shall thereafter be intrusted with the possession of goods, or 
 of the documents of title to goods, shall be deemed and taken 
 to be owner of such goods and documents, so far as to give 
 validity to any contract or agreement by way of pledge, lien, 
 or security bond fide made by any person with such agent so 
 intrusted as aforesaid, as well for any original loan, advance, 
 or payment made upon the security of such goods or docu- 
 ments, as also for any further or continuing advance in
 
 86 APPENDIX NO. III. 
 
 respect thereof, and such contract or agreement shall be bind- 
 ing upon and good against the owner of such goods, and all 
 other persons interested therein, notwithstanding the person 
 claiming such pledge or lien may have had notice that the 
 person with whom such contract or agreement is made is only 
 an agent. 
 
 2. And be it enacted, that where any such contract or 
 agreement for pledge, lien, or security shall be made in con- 
 sideration of the delivery or transfer to such agent, of any 
 other goods or merchandize, or document of title, or negoti- 
 able security, upon which the person so delivering up the 
 same had at the time a valid and available lien and security 
 for or in respect of a previous advance by virtue of some con- 
 tract or agreement made with such agent, such contract and 
 agreement, if bond fide on the part of the person with whom 
 the same may be made, shall be deemed to be a contract 
 made in consideration of an advance within the true intent 
 and meaning of this Act, and shall be as valid and effectual, 
 to all intents and purposes, and to the same extent, as if the 
 consideration for the same had been a bond fide present 
 advance of money : Provided alwaj'S, that the lien acquired 
 under such last-mentioned contract or agreement, upon the 
 goods or documents deposited in exchange, shall not exceed 
 the value at the time, of the goods and merchandize which, 
 or documents of title to which, or the negotiable security 
 which shall be delivered up and exchanged. 
 
 3. Provided always, and be it enacted, that this Act, and 
 every matter and thing herein contained, shall be deemed and 
 construed to give validity to such contracts and agreements 
 only, and to protect only such loans, advances, and exchanges, 
 as shall be made bond fide, and without notice that the agent 
 making such contracts or agreements as aforesaid has not 
 authority to make the same, or is acting maid fide in respect 
 thereof against the owner of such goods and merchandize ; 
 and nothing herein contained shall be construed to extend to 
 or protect, any lien or pledge for or in respect of any antece- 
 dent debt, owing from any agent to any person with or to 
 whom such lien or pledge shall be given, nor to authorize any 
 agent intrusted as aforesaid in deviating from any express 
 orders or authority received from the owner ; but that, for the 
 purpose and to the intent of protecting all such bond fide loans, 
 advances, and exchanges as aforesaid (though made with 
 notice of such agent not being the owner, but without any 
 notice of the agent's acting without authority), and to no 
 further or other intent or purpose, such contract or agreement 
 as aforesaid shall be binding on the owner and all other per- 
 sons interested in such goods. 
 
 4. And be it enacted, that any bill of lading, India warrant,
 
 THE FACTORS ACTS, 1823 — 1877. 87 
 
 dock warrant, warehouse keeper's certificate, warrant, or order 
 for the delivery of goods, or any other document used in the 
 ordinary courso of business as proof of the possession or con- 
 trol of goods, or authorizing or purporting to authorize, either 
 by indorsement or by delivery, the possessor of such document 
 to transfer or receive goods thereby represented, shall be 
 deemed and taken to be a document of title within the mean- 
 ing of this Act ; and any agent intrusted as aforesaid, and 
 possessed of any such document of title, whether derived 
 immediately from the owner of such goods, or obtained by 
 reason of such agent's having been intrusted with the posses- 
 sion of the goods, or of any other document of title thereto, 
 shall be deemed and taken to have been intrusted with the 
 possession of the goods represented by such document of title 
 as aforesaid, and all contracts pledging or giving a lien upon 
 such document of title as aforesaid, shall be deemed and taken 
 to be respectively pledges of and Hens upon the goods to which 
 the same relates ; and such agent shall be deemed to be pos- 
 sessed of such goods or documents, whether the same shall 
 be in his actual custody, or shall be held by any other person 
 subject to his control or for him or on his behalf; and where 
 any loan or advance shall be bond fide made to any agent 
 intrusted with, and in possession of, any such goods or docu- 
 ments of title as aforesaid, on the faith of any contract or 
 agreement in writing to consign, deposit, transfer, or deliver 
 such goods or documents of title as aforesaid, and such goods 
 or documents of title shall actually be received by the person 
 making such loan or advance, without notice that such agent 
 was not authorized to make such pledge or security, every such 
 loan or advance, shall be deemed and taken to be a loan or ad- 
 vance on the security of such goods or documents of title within 
 the meaning of this Act, though such goods or documents of 
 title shall not actually bo received by the person making such 
 loan or advance till the period subsequent thereto ; and any 
 contract or agreement, whether made direct with such agent as 
 aforesaid, or with any clerk or other person on his behalf, shall 
 be deemed a contract or agreement with such agent ; and any 
 payment made, whether by money or bills of exchange, or 
 other negotiable security, shall be deemed and taken to be an 
 advance within the meaning of this Act ; and an agent in pos- 
 session as aforesaid of such goods or documents shall be taken, 
 for the purposes of this Act, to have been intrusted therewith 
 by the owner thereof, unless the contrary can be shown in 
 evidence. 
 
 5. Provided always, and be it enacted, that nothing herein 
 contained shall lessen, vary, alter, or affect the civil responsi- 
 bility of an agent for any breach of duty or contract, or non-
 
 88 APPENDIX NO. III. 
 
 fulfilment of his orders or authority in respect of any such 
 contract, agreement, lien, or pledge as aforesaid. 
 
 [Section 6 is now superseded by the 24 Sf 25 Vict. c. 96, 
 ss. 78, 85 ; for which see Appendix, No. 2, ante, p. 75.] 
 
 7. Provided also, and be it enacted, that nothing herein 
 contained shall prevent such owner as aforesaid, from having 
 the right to redeem such goods or documents of title pledged 
 as aforesaid, at any time before such goods shall have been 
 sold, upon repayment of the amount of the lien thereon, or 
 restoration of the securities in respect of which such lien may 
 exist, and upon payment or satisfaction to such agent, if by 
 him required, of any sum of money for or in respect of which 
 such agent would by law be entitled to retain the same goods 
 or documents, or any of them, by way of lien as against such 
 owner, or to prevent the said owner from recovering of and 
 from such person with whom any such goods or documents 
 may have been pledged, or who shall have any such lien 
 thereon as aforesaid, any balance or sum of money remaining 
 in his hands as the produce of the sale of such goods, after 
 deducting the amount of the lien of such person under such 
 contract or agreement as aforesaid : Provided always, that in 
 case of the bankruptcy of any such agent, the owner of the 
 goods which shall have been so redeemed by such owner as 
 aforesaid shall, in respect of the sum paid by him on account 
 of such agent for such redemption, be held to have paid such 
 sum for the use of such agent before his bankruptcy, or in case 
 the goods shall not be so redeemed, the owner shall be deemed 
 a creditor of such agent for the value of the goods so pledged 
 at the time of the pledge, and shall, if he shall think fit, be 
 entitled in either of such cases to prove for or set off the sum 
 so paid, or the value of such goods, as the case may be. 
 
 8. And be it enacted, that in construing this Act the word 
 "person" shall be taken to designate a body corporate, or 
 company, as well as an individual ; and that words in the 
 singular number shall, when necessary to give effect to the in- 
 tention of the said Act, import also the plural, and vice versa ; 
 and words used in the masculine gender shall, when required, 
 be taken to apply to a female as well as a male. 
 
 9. Provided also, and be it enacted, that nothing herein 
 contained shall be construed to give validity to, or in anywise 
 to affect any coutract, agreement, lien, pledge, or other act, 
 matter, or thing made or done before the passing of this Act.
 
 THE FACTORS ACTS, 1823 — 1877. 89 
 
 40 &41 Vict. c. 39. 
 
 An Act to amend the Factors' Acts. 
 
 [10th August, 1877.] 
 
 Whereas doubts have arisen -with respect to the true 
 meaning of certain provisions of the Factors' Acts, and it is 
 expedient to remove such doubts and otherwise to amend the 
 said Acts, for the better security of persons buying or making 
 advances on goods, or documents of title to goods, in the usual 
 and ordinary course of mercantile business : 
 
 Be it enacted by the Queen's most excellent Majesty, by 
 and with the advice and consent of the Lords spiritual 
 and temporal, and Commons, in this present Parliament 
 assembled, and by the authority of the same, as follows : 
 
 1. In this Act, the expression "the principal Acts" means 
 the following Acts ; that is to say, 
 
 The Act of the 4th Geo. IV. (1823), c. 83. 
 The Act of the 6th Geo. IV. (1825), c. 94. 
 The Act of the 5th and 6th of her Majesty (1842), c. 39. 
 And the said Acts and this Act may be cited for all purposes 
 as the " Factors' Acts, 1823 to 1877.'" 
 
 2. "Where any agent or person has been intrusted with and 
 continues in the possession of any goods, or documents of title 
 to goods, within the meaning of the principal Acts as amended 
 by this Act, any revocation of his intrustment or agency shall 
 not prejudice or affect the title or rights of any other person 
 who, without notice of such revocation, purchases such goods, 
 or makes advances upon the faith or security of such goods or 
 documents. 
 
 3. "Where any goods have been sold, and the vendor or any 
 person on his behalf continues or is in possession of the docu- 
 ments of title thereto, any sale, pledge, or other disposition of 
 the goods or documents made by such vendor or any person 
 or agent intrusted by the vendor with the goods or documents 
 within the meaning of the principal Acts as amended by this 
 Act so continuing or being in possession, shall be as valid and 
 effectual as if such vendor or person were an agent or person 
 intrusted by the vendee with the goods or documents within 
 the meaning of the principal Acts as amended by this Act, 
 provided the person to whom the sale, pledge, or other dis- 
 position is made has not notice that the goods have been 
 previously sold. 
 
 4. "Where any goods have been sold or contracted to be 
 sold, and the vendee, or any person on his behalf, obtains the 
 possession of the documents of title thereto from the vendor 
 or his agents, any sale, pledge, or disposition of such goods 
 or documents by such vendee so in possession or by any other
 
 90 APPENDIX NO. III. 
 
 person or agent intrusted by the vendee with the documents 
 within the meaning of the principal Acts as amended by this 
 Act shall be as valid and effectual as if such vendee or other 
 person were an agent or person intrusted by the vendor 
 with the documents within the meaning of the principal 
 Acts as amended by this Act, provided the person to whom 
 the sale, pledge, or other disposition is made has not notice 
 of any lien or other right of the vendor in respect of the 
 goods. 
 
 5. Where any document of title to goods has been lawfully 
 indorsed or otherwise transferred to any person as a vendee or 
 owner of the goods, and such person transfers such document 
 by indorsement (or by delivery where the document is by 
 custom, or by its express terms transferable by delivery, or 
 makes the goods deliverable to the bearer) to a person who 
 takes the same bond Jide and for valuable consideration, the 
 last-mentioned transfer shall have the same eifect for defeat- 
 ing any vendor's lien or right of stoppage in transitu as the 
 transfer of a bill of lading has for defeating the right of 
 stoppage in transitu. 
 
 6. This Act shall apply only to acts done and rights 
 acquired after the passing of this Act.
 
 INDEX. 
 
 ADVANCE, 
 
 actual money, necessary for validity of pledge under Factors Act, 
 
 1842.. 3.3, 51. 
 pecuniary liability incurred by pledgee, a good consideration in lieu 
 
 of an, under Factors Act, 1889. .35. 
 further or continuing, need not be made to the same person to whom 
 
 the original advance was made, 35. 
 must be made bond fide, 39. 
 colourable, which is only a means of relieving pledgee from liability, 
 
 not protected, 39. 
 the bona fides of an, question for the jury, 39. 
 made to agent without notice that his authority has been revoked, is 
 
 protected, 40. 
 factor or agent unlawfully obtaining, Appendix II., 75. And see 
 
 Criminal Liability. 
 
 AGENT, 
 
 description of, under the earlier Factors Acts, 11, 22. 
 
 must be a factor or agent to whose employment a power of sale is 
 
 incident, 11. 
 interpretation of "agent intrusted" under earlier Factors Acts, 
 
 13, 23. 
 must have received possession of goods for purpose of sale or for 
 
 some object connected therewith, 14, 22. 
 mercantile, definition of , given by Factors Act, 21. 
 no longer required to be " intrusted " by Factors Act, 22. 
 but must have a prescribed authority, 23. 
 must be in possession of goods as agent, 24. 
 must be a mercantile agent, 24. 
 invested by Factors Act with a statutory authority superadded to 
 
 authority conferred by principal, 24. 
 under the Factors Act does not include warehouseman or wharfinger, 
 31. 
 nor clerk, servant, cashier, caretaker, &c, 31. 
 nor carrier or forwarding agent, 31. 
 civil and criminal liability of, preserved by 12th section of the 
 
 Factors Act, 1889.. 69. 
 carrying on business in two characters and intended only in one, 13, 26. 
 common law powers of, unaffected by the Factors Act, 71. And see 
 
 Agent Intrusted ; Factor; and Mercantile Agent. 
 
 AGENT INTRUSTED AND IN POSSESSION, 
 
 judicial interpretation of the term under the earlier Factors Acts, 13. 
 
 the Factors Act, 1889, substitutes a mercantile agent having pre- 
 scribed authority for, 22. 
 
 submitted that change of language has not effected a change in the 
 law, 25. And see Intrmtment.
 
 92 INDEX. 
 
 ANTECEDENT DEBT OR LIABILITY, 
 
 pledge by mercantile agent in respect of, 43. 
 
 what constitutes, 47 et seq. 
 
 decision under the previous Factors Act with reference to, 47. 
 
 APPARENT OR OSTENSIBLE OWNERSHIP, 
 
 doctrine of, 8. 
 
 confined by the earlier Factors Acts to the case of persons dealing 
 
 with mercantile agents, 9. 
 extended under Factors Act, 1877, to the case of seller or buyer in 
 possession of a document of title, 17. 
 re-enacted by Factors Act, 1889. .57 et seq. 
 
 AUCTIONEER, 
 
 does Factors Act apply to, 27, n. (g). 
 
 BARTER, 
 
 factor at common law not permitted to, 39, 51. 
 
 but empowered by the 5th section of the Factors Act, 1889 . . 39, 51 . 
 
 BILL OF LADING, 
 
 factor could not pledge previous to Factors Acts, 4. 
 a document of title under Factors Acts, 32. 
 effect of transfer of, 33, 66, 67. 
 See also Document of Title. 
 
 BONA FIDES, 
 
 of person dealing with agent, 39. 
 of transfer of a document of title, 66. 
 
 only requires that transferee is without notice of circumstances ren- 
 dering bill of lading not fairly and honestly assignable, 64. 
 
 BROKER, 
 
 definition of, 29. 
 
 statutory definition of mercantile agent includes, when in possession 
 
 of goods or of documents of title which he is employed to sell or 
 
 buy, 29. 
 when in possession of goods about which he is employed, is, strictly 
 
 speaking, a factor, and has implied authority to sell or pledge 
 
 them, 25. 
 for purchase of goods, had at common law implied authority to sell 
 
 tli em if left in his possession, 29. 
 employed to raise money upon the security of goods or of documents 
 
 of title, 30. 
 in possession of goods about which he is employed has same lien as a 
 
 factor, 44. 
 
 BUYER, 
 
 allowed to obtain possession of a document of title not within opera- 
 tion of earlier Factors Acts, 11, 16, 69. 
 
 law altered by Factors Act, 1877 .. 17. 
 
 dispositions by, obtaining possession of goods bought or of documents 
 of title under Factors Act, 1889. .60 et seq. 
 
 CASH RECEIPT, 
 
 transfer of, not equivalent to that of a delivery order, 68.
 
 INDEX. 93 
 
 CLERK OH SERVANT, 
 
 not an agent within Factors Acts, 31. 
 
 if authorize 1 in ordinary course of business may contract on agent's 
 behalf, 54. 
 
 CONSIGNEE, 
 
 Factors Act, 1823, applied only to, 9. 
 
 enabled to transfer lien for advances, 9. 
 
 confirmed by Factors Act, 1825. .9. 
 
 lien of, under 7th section of Factors Act, 1S89. .51. 
 
 CONSIGNOR, 
 
 for sale, within statutory definition of mercantile agent, 21, 25. 
 foreign, right of, to recover goods, 7 1 . 
 
 CRIMINAL LIABILITY, 
 
 of factor or agent under Larceny Act, 1861, Appendix No. II., 75. 
 of agent, preserved by 12th section of Factors Act, 18S9. .69. 
 
 DELEGATION OF AGENT'S AUTHORITY, 
 
 not permitted at common law without principal's assent, 54. 
 under 6th section of Factors Act, 1889. .54. 
 
 DELIVERY ORDER, 
 
 a document of title within definition of Factors Act, 1889. . 32. 
 
 effect of transfer of, at common law, 33, 66. 
 
 delivery of goods not complete until the bailee attorned to the buyer, 
 
 66. 
 transfer of, from a buyer to a sub-purchaser, did not at common law 
 
 divest seller's lien, 67. 
 transfer of, contrasted with that of a bill of lading, 67. 
 custom of merchants with reference to transfer of, 67. 
 effect of 10th section of the Factors Act, 1889, upon the transfer 
 
 of, 68. 
 transfer of, by buyer to sub-purchaser or pledgee divests in whole or 
 in part the original seller's rights, 68. 
 ali tcr as between seller and buyer, 68. 
 
 See also Document of Title. 
 
 DISPOSITION OF GOODS, 
 
 under Factors Act, 1825, must be in the nature of a sale or pledge, 38. 
 will include barter under Factors Act, 1889 . . 39. 
 
 DOCK WARRANT, 
 
 a document of title as denned by Factors Act, 1889. .32. 
 
 common law conception of, 33, 67. 
 
 effect of transfer of, independently of Factors Acts, 33, 67. 
 
 under Factors Act, 1889 . . 65 et seq. 
 
 by agent entrusted with bill of lading, 42. 
 And see Document of Title. 
 
 DOCUMENT OF TITLE, 
 
 definition of, in Factors Acts, 32. 
 
 includes bill of lading, dock warrant, warehouse-keeper's certificate, 
 
 warrant or order for delivery of goods, 32. 
 statutory and common law interpretation of, 33, 67. 
 practice of merchants with regard to, 33, 67.
 
 94 INDEX. 
 
 DOCUMENT OF TITLE— continued. 
 
 effect of Factors Act, 1877, upon transfer of, 34. 
 
 question whether a wharfinger's certificate is or is not a, 34. 
 
 recent cases upon the construction of trade documents alleged to he 
 
 documents of title, 34, n. (/>). 
 possession hy agent of a " derivative," 41. 
 prima facie presumption that he is in possession with the owner's 
 
 consent, 42. 
 a pledge of, deemed to he a pledge of the goods, 43. 
 seller allowed to remain in possession of, not an " agent intrusted " 
 
 therewith under Factors Act, 1825. .11, 16, 57. 
 law altered hy Factors Act, 1877, and re-enacted by Factors Act, 
 
 1889.. 17, 57. 
 buyer allowed to obtain possession of, not an "agent intrusted" 
 
 therewith under Factors Act, 1825.. 11, 16, 61. 
 law altered by Factors Act, 1877, and re-enacted by Factors Act, 
 
 1889.. 17, 60. 
 transfer of, from a buyer to bond fide sub-purchaser or pledgee, 
 
 62 et seq. 
 variance between the 9th and 10th sections of the Factors Act, 1889, 
 
 on this point, 63. 
 transferor of, must have a title to the goods represented by the docu- 
 ment, 65. 
 transfer of, may be by indorsement or by delivery under 11th section 
 of Factors Act, 1889.. 69. 
 
 And see Bill of Lading ; Delivery Order ; Bock Warrant; WJiar- 
 finger^s Certificate. 
 
 ESTOPPEL, 
 
 doctrine of, 8. 
 
 Factors Acts based upon, 9, 17. 
 
 did not apply to the case of a seller or buyer in possession of goods, 
 
 or of documents of title, 57, 61. 
 law altered by Factors Act, 1877, and re-enacted by Factors Act, 
 1889.. 57 et seq. 
 
 EXCHANGE OF SECURITIES, 
 
 by factor, not protected by Factors Act, 1825. .50, 52. 
 protected by Factors Act, 1842. .50, 53. 
 Factors Act, 1889, confirms this provision, 53. 
 lien on goods or documents of title deposited in exchange not to 
 
 exceed value of those given up, 53. 
 agent depositing goods or documents of title in exchange not neces- 
 sarily the original pledgor, 53. 
 
 FACTOR, 
 
 definitions of, 28. 
 
 at common law had authority to sell but not to pledge, 3. 
 
 the rale laid down in Paterson v. Tash, 3. 
 
 decisions before the Factors Acts on factor's power to pledge, 5, 
 
 n. (?). 
 first conferred by Factors Act, 1842. . 12. 
 implied authority of, 28. 
 
 term includes commission agent and assignee for sale, 29. 
 may also be consignor of goods, 29.
 
 INDEX. 95 
 
 FACTOR— continued. 
 
 dispositions by, in possession of goods or of documents of title with 
 
 owner's consent, 36 et seq. See Fledge and Sale. 
 pledge by, for antecedent debt or liability, 43. 
 lien of, its nature, 44. 
 
 what constitutes, 45 et seq. 
 pledge by, whose authority has been revoked, 40. 
 
 of a " derivative" document of title, 41. 
 exchange of securities by, 49 et seq. 
 conditional lien for, under liability for acceptances, 4G. 
 submitted that he can transfer a conditional lien, 46. 
 bankruptcy of, rights of owner on, 69 et seq. 
 criminal liability of, under Larceny Act, 1S61, Appendix No. II., 75. 
 
 And see Agent and Mercantile Agent. 
 
 FACTORS ACTS, 
 
 origin and history of, 3 et seq. 
 
 change of law and policy involved in, 6. 
 
 Factors Act, 1823 (4 Geo. IV. c. 83), 9. 
 
 1825 (6 Geo. IV. c. 94), 9—12. 
 1842 (5 & 6 Vict. c. 39), 12—16. 
 1877 (40 & 41 Vict. c. 39), 16—18. 
 1889 (52 & 53 Vict. c. 45), 19 et seq. 
 amendments contained in, 19. 
 summary of its provisions, 20. 
 For the text of the Factors Acts, 1823—1877, see Appendix 
 No. III., 78. 
 
 FRANCE, 
 
 law of, with relation to title to moveables, originally based upon the 
 
 civil law, 7. 
 afterwards adopted the doctrine that " possession constitutes title, " 8. 
 provisions of the Code Napoleon, Appendix No. I., 73. 
 
 FRAUD, 
 
 consent of owner to agent's possession obtained by, 37. 
 
 FURNITURE 
 
 in a furnished house not ' ' goods ' ' within meaning of the Factors 
 Acts, 32, n. {d). 
 
 GERMANY, 
 
 provisions of the commercial code of, relating to title to moveables, 
 Appendix No. I., 73. 
 
 GOODS, 
 
 definition of, in Factors Act, 32. 
 
 restricted to merchandise, 32. 
 
 will not include furniture in a furnished house, 32, n. (d). 
 
 sale of. See Sale of Goods. 
 
 GUARANTOR, 
 
 exchange of securities by a, 53. 
 
 HOUSE OF COMMONS, 
 
 inquiry of committee of, into law and practice relating to factor's 
 power to pledge, 5 et seq.
 
 96 INDEX. 
 
 INDIA WARE ANT, 
 
 no longer included as a document of title under Factors Act, 1889 . . 33. 
 
 INTRUSTMENT, 
 
 limiting signification attached to the expression by the Courts, 13, 23. 
 possession by agent only raised prima facie presumption of, under 
 
 Factors Act, 1842.. 14. 
 effect of Factors Act, 1889. .22 et seq. And see Agent Intrusted and 
 
 in Possession. 
 
 LIABILITY, 
 
 pecuniary, incurred by pledgee, good consideration for pledge under 
 
 Factors Act, 1889.. 35. 
 pledge made in respect of antecedent, 43 et scq. 
 what constitutes an antecedent, 47. 
 decisions under previous Factors Act reviewed, 47. 
 
 LIEN, 
 
 of consignee under Factors Acts, 1823 and 182.3. .9. 
 is transferable, 9. 
 factor's, nature of, 44. 
 
 not transferable at common law, 45. 
 
 what constitutes, 45. 
 
 submitted that it now includes factor's liability under accept- 
 ances, 46. 
 
 will not include a mere money claim unless general balance of 
 account in factor's favour, 46. 
 vendor's. See Vendor's Lien.' 
 
 LOAN. See Advance. 
 
 MARKET OVERT, 
 
 sale of goods in, 8. 
 
 MERCANTILE AGENT, 
 
 definition of, for the purposes of the Factors Act, 1889. .21. 
 
 principal classes of, 27. 
 
 Mr. Justice Story's classification, 27, n. (q). 
 
 disposition by, 36 et seq. 
 
 in possession of goods or documents of title with owner's consent, 
 
 substituted for " agent intrusted," of the earlier Factors Acts, 25, 
 
 37. 
 disposition by, whose authority has been secretly revoked, 40. 
 possession by, of "derivative" document of title, 41. 
 pledge by, for antecedent debt or liability, 43. 
 
 And see Agent and Factor. 
 
 NEGOTIABLE INSTRUMENT, 
 
 pledge of, valid independently of Factors Acts, 31. 
 Factors Act, 1889, does not affect, 53. 
 
 NOTICE, 
 
 person dealing with mercantile agent must have no, of agent's want 
 
 of authority, 36. 
 what constitutes, left to ordinary rules of evidence, 40.
 
 INDEX. 97 
 
 NOTICE— continued. 
 
 may be actual or constructive, 40. 
 
 verbal or in writing, 40. 
 rule as to, laid down by Lord Tenterden, 40. 
 modern tendency to limit doctrine of construction, 40. 
 doubtful how far distinguishable from knowledge, 40. 
 mere suspicion of agent's want of authority is insufficient, 40. 
 of pledgor's agency, no longer invalidates a pledge in respect of an 
 
 antecedent debt or liability, 44. 
 by consignee, that consignor is not owner, 56. 
 by second buyer or pledgee, of previous sale, 59. 
 
 OWNER OF GOODS, 
 
 under Factors Act, 1842, might rebut presumption of intrustment, 
 
 14, 25. 
 consent of, to agent's possession necessary, 37, 42. 
 
 obtained by agent's fraud, 37. 
 right of, to redeem goods or recover their proceeds from agent or 
 
 person claiming under a disposition from the agent, 70, 71. 
 foreign principal may avail himself of the 12th section of the Factors 
 
 Act, 1889.. 71. 
 
 PARTNER, 
 
 question whether the Factors Act applies to, 27, n (g). 
 
 PERSON, 
 
 interpretation of term in earlier Factors Acts as agent, 11, 16, 23. 
 includes any body of persons, corporate or unincorporate, 36. 
 
 PLEDGE, 
 
 factor no power to, before Factors Acts, 3. 
 
 cases decided thereon, 5, n. (a). 
 factor's power to, first conferred by Factors Act, 1842. . 12. 
 authority to, placed by Factors Act, 1889, on same footing with au- 
 thority to sell, 25. 
 agent's power to, not exhausted by first pledge, 32. 
 definition of, in Factors Act, 1889 . . 35. 
 a money advance necessary consideration for, under Factors Act, 
 
 1842.. 35. 
 a pecuniary liability incurred by pledgee a valid consideration for, 
 
 under Factors Act, 1889. .35. 
 by mercantile agent in possession of goods or documents of title with 
 owner's consent, 36. 
 now assumed to be within ordinary business of a mercantile 
 agent, 39. 
 of documents of title deemed to be a pledge of the goods, 43. 
 for antecedent debt or liability, 43 et seq. 
 
 valid to extent of agent's lien enforceable at time of pledge, 43. 
 for antecedent debt, Factors Act, 18S9, repeals proviso as to notice 
 of pledgor's agency contained in Factors Act, 1825. .44. 
 and extends protection to an antecedent liability which was ex- 
 cluded from Factors Act, 1825 . .44. 
 must be made to the same person to whom the pledgor is already in- 
 debted or liable, 49. 
 
 P. H
 
 98 INDEX. 
 
 PLEDGE— continued. 
 
 valid consideration for, defined, 49. 
 
 by seller continuing or being in possession of goods sold, or of docu- 
 ments of title relating thereto, 56 et seq. 
 
 by buyer obtaining possession of goods bought, or of documents of 
 title relating thereto, 60 et seq. 
 
 of a bill of lading, effect upon seller's right of stoppage in tran- 
 situ, 66. 
 
 seller entitled to surplus proceeds of sale after satisfying pledgee's 
 claim, 66. 
 
 POSSESSION, 
 
 only prima facie evidence of intrustment under Factors Act, 1842.. 
 
 13, 23. 
 of goods or documents of title by mercantile agent must be with 
 
 owner's consent under Factors Act, 1889. .36. 
 only prima facie evidence of owner's consent thereto, 37, 42. 
 of agent obtained by fraud, 37. 
 
 actual custody of goods or documents of title not necessary, 31. 
 by another person subject to the agent's control, and on his behalf, 
 
 sufficient, 32. 
 of a document of title derived from possession of goods or of another 
 
 document, 41. 
 seller or buyer continuing in, or obtaining, of goods or of a document 
 
 of title, 11, 16, 56 et seq. 
 
 POSSESSION CONSTITUTES TITLE {POSSESSION VAUT 
 TITHE), 
 
 doctrine adopted by commercial nations of Europe with regard to 
 moveables, 8. 
 
 REDEMPTION, 
 
 right of, by owner of goods, 69. 
 
 REVOCATION OF AUTHORITY, 
 
 secret, of agent, does not affect title of bond fide purchaser or 
 pledgee, 40. 
 
 SALE OF GOODS, 
 
 by factor under 4th section of Factors Act, 1825 . . 10. 
 
 apparently only confirmatory of the common law, 10. 
 
 by mercantile agent under Factors Act, 1889 . . 36 et seq. 
 
 valid consideration for, defined, 49. 
 
 by seller, continuing or being in possession of goods sold or of a 
 document of title thereto, 56. 
 
 by buyer, allowed to obtain possession of g - oods bought or of a docu- 
 ment of title thereto, 60. 
 
 unnecessary that there should be a memorandum of contract to satisfy 
 Statute of Frauds, 60. 
 
 effect of, by buyer, accompanied by transfer of a document of title 
 upon original seller's rights, 65. 
 
 SCOTLAND, 
 
 by law of, possession of moveables constitutes title, 8. 
 Factors Act, 1889, does not apply to, 72.
 
 INDEX. 99 
 
 SELLER, 
 
 allowed to remain in possession of a document of title not within the 
 
 operation of the earlier Factors Acts, 11, 16. 
 disposition by, continuing or being in possession of goods or of docu- 
 ments of title, 56 ct scq. 
 not provided for by the three earliest Factors Acts, 57. 
 Factors Act, 1889, substantially re-enacts Factors Act, 1877, on this 
 
 point, 58. 
 particulars in which it amends the law, 58, 59. 
 
 SET-OFF, 
 
 buyer may set-off a debt due from the factor to himself against the 
 
 price, 51, n. («■). 
 buyer or consignee may set-off any claim upon the agent against the 
 
 principal's demand for the goods, 71. 
 
 SHIPMENT, 
 
 of goods in consignor's name, 55. 
 
 STOPPAGE IN TRANSITU, 
 
 effect of transfer of bill of lading upon right of, 65. 
 seller's right of, defeated in whole or in part by transfer of a docu- 
 ment of title from a buyer to a bona fide sub-purchaser or pledgee, 
 65 et seq. 
 as affected by a sub-sale during transit, 66. 
 
 by a pledge, 66. 
 not defeated by transfer of cash receipts to a sub-purchaser, 68. 
 
 SUSPICION 
 
 of agency does not invalidate disposition, 40. 
 
 TITLE, 
 
 to goods, rule of English common law that no one can give a better, 
 
 than he himself possesses, 7. 
 exceptions to this rule, 8. 
 
 possession constitutes, rule of commercial nations of Europe, 8. 
 document of. See Document of Title. 
 
 VENDOR'S LIEN, 
 
 divested in whole or in part by the transfer of a document of title 
 
 from a buyer to a bond fide purchaser or pledgee, 60, 65. 
 not divested by the transfer of a delivery order or dock- warrant from 
 
 seller to buyer, 62. 
 otherwise by the transfer of a bill of lading, 62, 64. 
 
 WAREHOUSEMAN, 
 
 not an agent within the meaning of the earlier Factors Acts, although 
 he also carry on business as a factor, 11, 13. 
 nor within the statutory definition of a mercantile agent in 
 Factors Act, 1889.. 26. 
 
 WAREHOUSE-KEEPER'S CERTIFICATE, 
 
 a document of title as defined by the Factors Act, 1889.. 32. See 
 Document of Title.
 
 100 INDEX. 
 
 WARRANT, 
 
 a document of title as defined by the Factors Act, 1889.. 32. And 
 see Dock- Warrant ; Document of Title. 
 
 "WHARFINGER, 
 
 not an agent within the meaning of the earliei' Factors Acts, although 
 
 he also carry on business as a factor, 11, 13. 
 law not altered by the Factors Act, 1889 . . 26. 
 
 WHARFINGER'S CERTIFICATE, 
 
 not specified as a document of title under Factors Act, 1889. .32. 
 whether or not document of title will depend upon its form, 34. See 
 Document of Title. 
 
 THE END. 
 
 LONDON : PRINTED DY C. F. EOWOBTH, GEEAT NEW STEEET, E.C 
 
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