FACTOR. An agent employed to sell the goods of another; in the United States such an agent is usually called a commission merchant, because he has his compensation in a commission or per centage upon the goods he sells. He differs from a broker in that he has actual possession of the goods of his principal, and is empowered to de liver them to the purchaser as if they were his own. He often buys and sells in his own name, so that those dealing with him may not know whether he is owner or factor. Under some limitations for self-protection, he is hound by the instructions of his principal and responsible for damages arising from a violation thereof. As a rule he must obey special instructions. and if none are given, he is bound to use all reasonable in the management of the property com mitted to his to employ the usual meth ods of business, and to have due regard to the interests and welfare of his employer. Other wise he is not entitled to his commissions, and for injurious neglect of duty may even be sued by his principal. He cannot delegate his au thority without express permission of his prin cipal unless such delegation is justified by gen eral usage or by stress of peculiar circumstances. He cannot sell goods at a sacrifice for the pur pose of obtaining his commission and advances.
It is generally held that a factor who has made advances 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 factor can sell enough of them to reimburse himself if the principal unreasonably neglects or refuses to pay him. Sometimes, in consideration of an increased commission, lie guarantees to the principal payment for the goods which have been sold. In that case he acts under a del credere, or guaranty, commission, and is in general subject to most of the obligations of a surety. It was formerly held that a factor whose principal re sides in a foreign country is personally liable to the other party, even though the foreign prin cipal was disclosed. The modern view is, how ever, that a factor who names his principal is not personally liable on contracts made for his prin cipal, whether foreign or domestic, provided they are within the factor's authority and do not pro fess to bind him personally. See AGENT. Consult : :Mechem, Treatise on the Law of Agency (Chi cago. 1A891; Evans, Treatise on the Law of Prin cipal and Agent (New York and Albany, 1891).