FACTOR ACTS. A term applied to a number of American and English statutes vali dating sales, pledges and other business trans actions of factors with bona-fide purchasers, pledgees, etc. Among the English statutes were those enacted in 1823, 1842, 1877 and 1889. The last-named statute in part extends the former statutes and in part re-enacts them. Many statutes having practically the same effect as those of England have been enacted in the United States. These acts were deemed neces sary to relieve the extreme hardships of ten resulting from the application of the common law doctrine that the purchaser buys at his peril, the vendor giving no better title than he has himself. This frequently resulted in the perpetration of numerous frauds by unscrupu lous persons on innocent purchasers, pledgees and the like. By the terms of these acts any agent having possession of goods or the bill of lading, warehouse keeper's certificate, or other document of title, with the consent, actual or apparent, of the real owner, should be deemed to be the owner of the goods for the purpose of validating any lien, pledge or the like, made bona-fide by any person with such agent and for payments and advances made on the secu rity of the goods or evidences of title thereto. It was further provided by some of these acts that such contracts were to be binding upon the real owner of the goods and all persons inter ested therein, even if the purchaser, pledgee or the like was aware of the fact that the per son with whom he dealt was the agent and not the real owner. The tendency of recent legis
lation, both in England and in many jurisdic tions in the United States, is toward extending the scope of the law in the direction of an entire abrogation of the common-law doctrine on the subject of contracts made with agents or others having possession of personal property or evidences of title thereto with the perms sion, real or apparent, of the owner. The prin cipal by these statutes is compelled to use cau tion in the selection of persons who represent him in business transactions, as ordinarily third persons dealing bona-fide with such represent atives will be protected. In a few States, how ever, persons dealing with agents, knowing them to be such, will not be protected. In a number of States factor acts restrict the doctrine to mercantile transactions and in other States the acts provide that the goods must have been entrusted to the agent for the purpose of sale in order to validate contracts made in relation thereto. See AGENT ; CAVEAT EMPTOR ; FACTOR.