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their representative character, before notice of claim of *the principal. (a) The same rule applies to the case of 624 a banker, who fails, possessed of his customer's property.

If it be distinguishable from his own, it does not pass to his creditors, but may be reclaimed by the true owner, subject to the liens of the banker upon it. (b) 2

Though payment to a factor, for goods sold by him be valid, the principal may control the collection, and sue for the price in his own name, or for damages for non-performance of the contract; and it is immaterial whether the agent was an auctioneer or common factor. (c)

There are some cases in which a factor sells on credit at his own risk. When he acts under a del credere commission, for an additional premium, he becomes liable to his principal when the purchase-money falls due; and according to the doctrine in some of the cases, he is substituted for the purchaser, and is bound to pay, not conditionally, but absolutely, and in the first instance. The principal may call on him without first looking to the actual vendee. This is the language of the case of Grove v. Dubois, (d)

(a) Veil v. Mitchell, 4 Wash. C. C. 105. Taylor v. Plumer, 3 Maule & Selw. 562. (b) Walker v. Burnell, Doug. 317. Bryson v. Wylie, 1 Bos. & Pull. 83, n. Bolton v. Puller, Ibid. 539. In the case of Sargeant, 1 Rose (Cas.) 153. Parke v. Eliason, 1 East, 544. 3 Mason, 242.

(c) Girard v. Taggart, 5 Serg. & Rawle, 19.

(d) 1 Term Rep. 112.

1 Warner v. Martin, 11 How. U. S. 209. Beach v. Forsyth, 14 Barb. (N. Y.) 499. Fahnestock v. Bailey, 3 Met. (Ky.) 48. Blackman v. Green, 24 Vermont, 17. Benny v. Pegram, 18 Mis. 191. In this last case it was held to make no difference that there was a balance against the principal in favor of the factor.

2 Bankers have a general lien, by the law-merchant, which will be judicially noticed, like the negotiability of bills of exchange. Brandao v. Barnett, 3 M. G. & S. 530. The circumstances under which this lien will arise have lately been under the consideration of the Supreme Court of the United States. It was there held,

1. That a bank has no lien for its general balance against a person, upon funds deposited by him when such person was known to have acted as agent for another, to whom the deposit wholly belonged.

2. That if it was not known to the bank that the depositor was an agent, and though he was treated as owner, yet the bank has no such lien, as against the owner, unless credit had been given to the agent upon the security of such deposit, in the usual course of business.

3. That in case the agency was unknown, and such credit had been given, the bank was entitled to a lien; for its general balances were against the owner of the deposit. Bank of the Metropolis v. New England Bank, 6 How. U. S. 512. See, also, Lawrence v. The Stonington Bank, 6 Conn. 521. It may not be easy to reconcile the latter case with the case in Howard's Reports.

See, on the subject generally, Jones v. Starkey, 11 Eng. L. & Eq. 235.

and it seems to have been adopted and followed in Leverick v. Meigs; (e) and yet there is some difficulty and want of precision in the cases on the subject. It is said, that a factor under a del credere commission, is a guarantor of the sale, and that the notes he takes from the purchaser belong to his principal, equally as if he had only guaranteed them. (ƒ) If he sells under a del credere commission, he is to be considered, as between himself and the vendee, as the sole owner of the goods; and yet he is considered

only as a surety. (g) In some late cases in the C. B., in * 625 England, (h) * the doctrine in the case of Grove v. Dubois was much questioned, and it was considered to be a vexata quæstio, whether a del credere commission was a contract of guaranty merely on default of the vendee, or one altogether distinct from it, and not requiring a previous resort to the purchaser. (a) 1

(e) 1 Cowen, 645.

(ƒ) But if he takes depreciated paper in payment, he must account for the full value in specie. Dunnell v. Mason, 1 Story C. C. 543.

(g) Chambre J., 3 Bos. & Pull. 489. Thompson v. Perkins, 3 Mason, 232. A del credere factor or agent may sell in his own name. This is according to a custom in the London corn-market. Johnston v. Usborne, 11 Adol. & Ell. 549.

Peel v. Northcote, Ibid. 478.

(h) Gall v. Comber, 7 Taunt. 558. (a) The liability of a factor to his principal for the proceeds of sales made by him under a del credere commission, is not affected by the statute of frauds; for the undertaking is original, and not collateral. Swan ». Nesmith, 7 Pick. 220. Wolff v. Koppel, 5 Hill (N. Y.) 458. The correct legal import of a del credere engagement, says Mr. Bell, is an engagement to be answerable, as if the person so binding himself was the proper debtor. 1 Bell's Com. 378. But the final settlement of the question in the English courts is otherwise, and the doctrine of the case of Grove v. Dubois may be considered as overruled. It was held, in Morris v. Cleasby, (4 Maule & Selw. 566,) that the character of a broker, acting under a del credere commission, was that of a surety, for the solvency of the party with whom his principal deals through his agency. He becomes a guarantor of the price of the goods sold, and has an additional percentage for his responsibility. This was the opinion of Mr. Justice Story, in the case of Thompson v. Perkins, 3 Mason 236, and confirmed in his Commentaries on Agency, § 215. In Wolff v. Koppel, 2 Denio, 368, this point was discussed and much considered in the New York Court of Errors; the conclusion was, that the contract of a factor to account for the amount of sales under a del credere commission, was not within the statute of frauds, and need not be in writing.

1 An engagement of a factor to sell upon a del credere commission, need not be in writing. Coutourier v. Hastie, 16 Eng. L. & Eq. 562. It is an original, and not a collateral contract, and is not within the statute of frauds. Bradley v. Richardson, 23 Vermont, 721. Sherwood v. Stone, 14 N. Y. 267. He has the same claim on his principal for advances under a del credere as under an ordinary commission. Graham v. Ackroyd, 19 Eng. L. & Eq. 654. The guaranty of a del credere commission does not extend to the remittance of receipts; but, if it is agreed that remittances shall be guaranteed, and a commission charged therefor, the

Though a factor may sell and bind his principal, he cannot pledge the goods as a security for his own debt, not even though there be the formality of a bill of parcels, and a receipt.2 The principal may recover the goods of the pawnee; and his ignorance that the factor held the goods in the character of factor, is no excuse. The principal is not even obliged to tender to the pawnee the balance due from the principal to the factor; for the lien which the factor might have had for such balance is personal, and cannot be transferred by his tortious act, in pledging the goods for his own debt. Though the factor should barter the goods of his principal, yet no property passes by that act, any more than in the case of pledging them, and the owner may sue the innocent purchaser in trover. (b) The doctrine that a factor cannot pledge, is sustained so strictly, that it is admitted he cannot do it by indorsement and delivery of the bill of lading, any more than by delivery of the goods themselves. (c) To pledge the goods of the principal, is beyond the scope of the factor's power; and

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every attempt to do it under color of a sale, is tortious *626 and void. If the pawnee will call for the letter of advice,

or make due inquiry as to the source from whence the goods came, he can discover (say the cases) that the possessor held the goods as factor, and not as vendee; and he is bound to know, at his peril, the extent of the factor's power. (a) There may be a question, in some instances, whether the res gesto amounted to a sale on the part of the factor, or was a mere deposit or pledge as collateral security for his debt. But when it appears that the goods were really pledged, it is settled that it is an act beyond the authority of the factor, and the principal may look to the pawnee. There is an exception to the rule in the case of negotiable paper,

(b) Guerreiro v. Peile, 3 B. & Ald. 616. Rodriguez v. Heffernan, 5 Johns. Ch. 429. (c) Martini v. Coles, 1 Maule & Selw. 140. Shipley v. Kymer, Ibid. 484. Graham v. Dyster, 6 Ibid. 1.

(a) Patterson v. Tash, 2 Str. 1178. Daubigny v. Duval, 5 Term Rep. 604. De Bouchout v. Goldsmid, 5 Vesey, 211. M'Combie v. Davies, 7 East, 5. Martini v. Coles, 1 Maule & Selw. 140. Fielding v. Kymer, 2 Brod. & Bing. 639. Kinder v. Shaw, 2 Mass. 398. Van Amringe v. Peabody, 1 Mason, 440. Bowie v. Napier, 1 M'Cord, 1.

factor is liable, whether he charge the commission or not. Heubach v. Mollman, 2 Duer 227. Kennedy v. Strong, 14 Johns. 128. Rodriguez v. Heffernan, 5 Johns. Ch. 417. Walther

v. Wetmore, 2 Bosw. 401. So the factor may himself sell the goods he has already pledged. Nowell v. Pratt, 5 Cush. 111. Contra, Bott v. McCoy, 20 Ala. 578.

for their possession and property go together, and carry with them a disposing power. A factor may pledge the negotiable paper of his principal as security for his own debt, and it will bind the principal, unless he can charge the party with notice of the fraud, or of want of title in the agent. (b) 1

But though the factor cannot pledge the goods of his principal as his own, he may deliver them to a third person for his own security, with notice of his lien, and as his agent, to keep possession for him. Such a change of the lien does not divest the factor of his right, for it is in effect a continuance of the factor's posses

sion. (c) So, if a factor having goods consigned to him for * 627 sale, should put them into the hands of an auctioneer or commission merchant connected with the auctioneer in business, to be sold, the auctioneer may safely make an advance on the goods for purposes connected with the sale, and as part-payment in advance, or in anticipation of the sale, according to the ordinary usage in such cases. (a) But if the goods be put into the hands of an auctioneer to sell, and, instead of advancing money upon them in immediate reference to the sale, according to usage, the auctioneer should become a pawnbroker, and advance money on the goods by way of loan, and in the character of pawnee instead of seller, he has no lien on the goods. It may be difficult, perhaps, to discriminate in all cases between the two characters. It will be a matter of evidence and of fact, under the circumstances. The distinction was declared in Martini v. Coles, (b) and it was observed in that case, that it would have been as well if the law had been, that where it was equivocal whether the party acted as principal or factor, a pledge in a case free from fraud should be valid. To guard against abuses and fraud, it is ad

(b) Collins v. Martin, 1 Bos. & Pull. 648. Treuttel v. Barandon, 8 Taunt. 100. Goldsmyd v. Guden, in chancery, and cited in Collins v. Martin. Trover will lie by the principal against the agent, when the latter converts the property to his own use, or disposes of it contrary to his instructions. M'Morris v. Simpson, 21 Wendell, 610. (c) M'Combie v. Davies, 7 East, 5. Urquhart v. M'Iver, 4 Johns. 103. (a) Laussatt v. Lippincott, 6 Serg. & Rawle, 386. If goods be consigned to a commission-merchant or factor for sale, at a limited price, and he makes advances on them, and they cannot be sold for that price, he may, on reasonable notice to his principal, at a fair market, sell them below that price for his indemnity. Frothingham v. Everton, 12 N. Hamp. 239.

(b) 1 Maule & Selw. 140.

1 Warner v. Martin, 11 How. U. S. 209.

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mitted, that if the factor be exhibited to the world as owner, with the assent of his principal, and by that means obtained credit, the principal will be liable. It was suggested, in the case last mentioned, that perhaps if a consignment of goods to a factor to sell, be accompanied with a bill drawn on the factor for the whole or part of the price of the consignment, an advance to take up the bill of the consignor, and appropriated to that end might be considered as an advance, under the authority given by the principal, so as to bind him to a pledge by the factor for that purpose. But in Graham v. Dyster, (c) it was decided by the K. B., * 628 that though the principal drew upon his factor for the amount of the consignment, and the goods were sent to the factor to be dealt with according to his discretion, the factor could not pledge the goods, even in that case, to raise money to meet the bills. This was a very hard application of the general rule; and the cases go so far as to hold, that though there should be a request of the consignor accompanying the consignment, that his agent, the consignee, will make remittances in anticipation of sales, that circumstance does not give an authority to pledge the goods to raise money for the remittance. (a) In the last case referred to, the judges of the K. B. expressed themselves decidedly in favor of the policy and expediency of the general rule of law, that a factor cannot pledge. They considered it to be one of the greatest safeguards which the foreign merchant had in making consignments of goods to England; and that, as a measure of policy, the rule ought not to be altered. It operated to increase the foreign commerce of the kingdom, and was founded, it was said, upon a very plain reason, viz.: that he who gave credit, should be vigilant in ascertaining whether the party pledged had, or had not, authority so to deal with the goods, and that the knowledge might always be obtained from the bill of lading and letters of advice. (b)

(c) 2 Starkie, 21. If, however, the owner arms the factor with such indicia of property, as to enable him to deal with it as his own, and mislead others, the factor, in that case, can bind the property by pledging it. Boyson v. Coles, 6 Maule & Selw. 14. (a) Queiróz v. Trueman, 3 Barn. & Cress. 342.

(b) C. J. Best, in Williams v. Barton, 3 Bing. 139, expressed himself, on the other hand, strongly in favor of the policy of allowing a pawnee of goods to hold against the real owner, who permitted the pawnor to deal with the property as if it was his own. He insisted that the old law on this subject was not adapted to the new state of things, and to the alterations in the mode of carrying on commerce. The rule that a factor cannot pledge the goods consigned to him for sale, even for bonâ fide advances, in the regular