Home >> Cyclopedia Of Knowledge >> England And to Germanic Confederation >> Factor


law, pledgee, principal and money

FACTOR is a mercantile agent, who buys and sells the goods of others, and transacts their ordinary business on com mission. He is intrusted with the pos session, management, and disposal of the goods, and buys and sells in his own name, in which particulars consists the main difference between factors and brokers. [Baogen.j The chief part of the foreign trade of every country is carried on through fac tors, who generally reside in a foreign country, or in a mercantile town at a dis tance from the merchants or manufac turers who employ them ; and they differ from mere agents in being intrusted with a general authority to transact the affairs of their employers. The common duty of a factor is to receive consignments of goods, and make sales and remittances, either in money, bills, or purchased goods in return ; and he is paid by means of a percentage or commission upon the money passing through his hands. It is usual for a factor to make advances upon the goods consigned to him, for which, and also for his commission, he has a general lien upon all the property of his employer which may at any time be in his hands.

Previously to the stet. 6 George IV. c. 94, a factor had only authority to sell the goods of his principal, and if he pledged them, the principal might recover them from the pledgee. But by this sta tute the pledgee of a factor, when he lends his money without notice that the factor is not the actual owner of the goods, is enabled to retain them for his security ; and even when he has such notice, the lender has a lien upon the goods to the same amount as the factor was entitled to The rights and liabilities of merchants and factors are governed by the laws of the place in which they are domiciled ; and any contract which may be made by either of them must be governed by the law of the place where it is made ; and these rules are acted upon by the courts of justice of every civilized nation. Thus,

since the passing of the above-mentioned statute, a foreign merchant cannot recover his goods from the pledgee of the factor in England, though he may be totally ignorant of the change which has taken place in the law. Again, if a bill be accepted in Leghorn by an Englishman, and the drawer fails, and the acceptor has not sufficient effects of the drawer in his hands at the time of acceptance, the acceptance becomes void by the law of Leghorn, and the acceptor is discharged from all liability, though by the law of England he would be bound. (See 2 Strange's Reports, 733; Beawe's Lex Mere. ; Bells Commentaries ; Paley, Principal and Agent.)