1 Ante, % 96.

150 Principal and tiiiiid pakty.

his failure to do so.^ He can depart from sndi instructions

only wlicn justified by an emergency in i\w nature of reason-

able necessity ,2 or where he acts to protect himself from loss

on his own advances or disbursements.^ But as between the

principal and third persons, the former is bound by the

contracts made by the factor within the apparent scope of

his authoritv. And this is very large. Custom has annexed

to the agency powers so extended that buyers of the goods

are o-enerally protected when they buy in the usual manner

and in. the course of commercial dealings, and these customs

have been supplemented by legislation looking to the same

end.* Accordingly the factor has power to sell the goods in

his own name, and at such time and for such prices as he

deems best ;^ to warrant them so far as warranties are usual

In the sale of similar goods '/' to receive payment in a sale

for cash, or negotiable paper in a sale on credit ; ' to sell on

credit so far as it is usual in similar cases to do so ;^ and even

to pledge the goods when necessary to secure the payment of

charges against them or a draft drawn against the prospective

proceeds by the principal.^ lie has no authority to barter

the goods in exchange for others ; '^^ or to pledge them except

to secure advances ; " or to receive anything for them except

lawful currency ; or to compromise or arbitrate or subse-

1 Talcott V. Chew, 27 Fed. Rep. 273; Phillips v. :\Ioir, G9 111. 155.

2 Greenleaf v. Moody, 13 Allen (Mass.), 363.

8 Davis V. Kobe, 36 Minn. 211 ; Weed v. Adams, 37 Conn. 378; Parker

V. Brancker, 22 Pick. (Mass.) 40. Cf. Sims v. Miller, 37 S. C. 402.

* Post, В§ 171.

6 Baring v. Corrie, 2 B. & A. 137; Smart r. Sandars, 3 C. B. 380.

<-' Dingle v. Hare, 7 C. B. n. s. 145; Randall v. Kehlor, GO Me. 37;

Argersinger v. Macnaughton, 114 X. Y. 535.

7 Drinkwater v. Goodwin, Cowp. 251 ; Daylight Burner Co. v. Odlin,

51 N. II. 56.

8 Houghton V. Matthews, 3 B. & P. 485; Goodenow v. Tyler, 7 Mass.

36; Pinkham v. Crocker, 77 Me. 503.

9 Boyce v. Bank, 22 Fed. Rep. 53.

10 Guen-eiro v. Peile, 3 B. & A. 616; Wheeler, &c. Co. v. Givan, 65

Mo. 89.

11 Martini I'. Coles, 1 M. & S. 140; Warner r. :\Iartin, 11 IIow. (U. S.)

209.

CONTRACT FOR DISCLOSED PRINCIPAL. 151

quently extend the time of payment of the amount due on

the sale.i The factor may sell in his own name, and it

follows that the customary powers partake largely of the

powers of an owner. The limitation is that the agent must

sell, not pledge, or barter ; but even this limitation has been

removed by statute in many jurisdictions for the protection of

innocent parties.^

(3) Rights and liaUlities of principal. For all contracts

made by the factor within the scope of the authority, as above

explained, the principal is liable, and under the Factors Acts

he is bound even where the factor pledges or barters the

goods for his own benefit.^ And this is true whether the

principal be disclosed or not. In like manner the principal

may avail himself of the benefits of the contract, whether

disclosed or not.* The subject of foreign principals dealing

through domestic factors is discussed hereafter.^

В§ 112. Brokers.

(1) Definition. A broker is an agent or middleraaii whose

business it is to make a bargain for another, or bring persons

together to bargain, and receive a commission on the trans-

action as compensation.^ He differs from a factor in that he

does not usually have possession of the property which is the

subject matter of the transaction, and in that he deals in the

name of his principal. The field of brokerage is much larger

than that of factorage. The factor buys and sells goods.

The merchandise broker also does that ; but there are in

addition note and exchange brokers who buy and sell nego-

tiable paper and foreign exchange ; stock brokers who buy

and sell stocks, bonds, and other securities ; real estate brokers

who buy and sell, rent and mortgage real estate; insurance