FACTOR (ante), a man employed to sell the goods of another; in the United States usually called a commission merchant, because he has his compensation in a commission or percentage upon the goods he sells. He differs from a broker in that he has actual possession of the goods of hisprincipal, and is empowered to deliver them to the purchaser precisely as if they were his own. He generally buys and sells in his own name, so that those dealing with him may not know whether he is owner or factor. sonic ]imi tations for self-protection, he is bound by the instructions of his principal and responsi ble for damages arising from a violation thereof. A factor is entitled to his commissions only after he has rendered the full service by which they were to be earned. He is responsible to his principal for losses incurred by want of ordinary care and skill in the transaction of business. In the absence of particular instructions he must follow the established rules and methods of the business in which he is engaged. He cannot dele gate his authority without express permission of his principal, except in conformity to general usage or by stress of peculiar circumstances. His discretion is large, but he is bound to use it with due regard to the interest of his principal. He cannot sell goods
at a sacrifice for the purpose of obtaining his commissions and advances. It is gener ally held in the United States that a factor who has made advance's upon goods acquires such an interest in them that the principal cannot take them out of his possession by a revocation of his authority. The latter can sell enough of them to reimburse himself, the principal having power over the remainder. In many American states, a factor is deemed to be the true owner in the sense that sales made by him to purchasers acting in good faith are valid. Generally he acts under what is called a "guarantee," or "commission," i.e., a commission received as a consideration for guaranteeing to the principal payment for the goods which he sells. A factor whose principal resides in a foreign country stands to purchasers, in most respects, in the relation of an absolute owner. If a factor commits any wrongful act in a sale. the principal has the right to recover his goods wherever he can trace them, unless they are in possession of one who purchased them in good faith.