In law. ВЂ” There are certain classes of Mercantile Agents,

who have a certain implied authority in regard to the

business for which they are employed ; the extent of the

authority which is implied having been settled, either by

the Common Law ; or by Statutory Enactment, such as the

Factors Act of 1889 (52 & 53 Vict. c. 45).

The following are some of the chief classes of such

agents : —

Factors. — A Factor is a mercantile agent who is entrusted

witli the possession of goods, wares, or merchandise, for the

purpose of selling them on behalf of his principal.

Stevann v. Blllcr (1883), 25 Ch. D. 31. C. A. ; here Cotton,

L,J,, said ; " He (a factor) is an agent entrusted with the

possession of goods for the purpose of sale. That is the

true definition of a factor."

A Factor is sometimes called a Commission Agent, or

a C'onsignee. Ho has at ( 'ommon Law the following implied

autliority : —

AUTHORITY OF AGENTS. 27

(a) An authority to sell in his own name : subject,

however, to the rules that apply in cases of agents acting

for undisclosed principals.

Baring v. Corrie (1818), 2 B. & Aid. 143 ; here it was

held that a factor having possession of the goods has

authority to sell in his own name without disclosing that

of his principal, and usually does so ; but a broker not

having possession of the goods has no authority to sell in

his own name ; and if therefoi'e he does so, he exceeds

the scope of his authoi'ity and his principal is not bound.

(6) An authority to give a warranty when it is usual

in the particular business in which he is employed — vide

Brady v. Todd (1861), 9 C. B. N.S. 592.

(c) An authority to receive payments and to give

receipts — vide Drinkwater v. Goodivin (1775), 1 Cowp.

251, & Houghton v. Mathews (1803), 3 B. & P. 488.

(d) An authority to sell on the usual terms of credit,

Houghton v. Mathexus, ubi supra ; here Chambre, J., said ;

" There is no doubt of the authority of a factor to sell upon

credit, though not particularly authorized by the terms of

his commission so to do."

(e) An authority to insure for his principal — vide

Lucena v. Crawford (1802), 2 B. & P. N. R. 269, and Waters

V. Monarch Life Assurance Gonvpany (1848), 5 El. ki B. 870.

(/) He has a general lien for the general balance of his

account — vide Kruger v. Wilcox (1755), Amb. 252, and

Walker v. Birch (1795), 6 T. K 2o8— vide at p. 77, 2^ost.

The CWimon Law does not give a factor any implied

authority to pledge goods, as this was not a necessary

incident of his employment to sell them.

28 TEE LAW OF AGENCY.

Cole V. London & North Western Bank (1875), L. R.

10 C. P. 354-; here Blackburn, J., said; "The proposition

that a factor is not by his employment authorized to

pawn or pledge goods entrusted to him, was for many years

controverted in point of fact. But it having once been

decided as a matter of law that he is not so authorized, the

Courts adhered to what had been so decided."

The Factors Acts, however, gave a factor an implied

authority to pledge the goods. The Factors Acts of 1823,

1825, 1842, and 1877 have now been amended and con-

solidated in the Factors Act, 1889 (52 & 55 Vict. c. 45),

which not only applies to factors, but to all mercantile

agents ; and also contains certain provisions regarding

sellers and buyers of goods who have the possession of

such goods, or of the documents of title to them. Section 1,

sub-section (1), of the Factors Act, 1889, defines, for the

purposes of the Act, a mercantile agent as follows :

" The expression "mercantile agent" shall mean a mercantile

agent having in the customary course of his business as

such agent, authority either to sell goods, or to consign

goods for the purpose of sale, or to buy goods, or to raise

money on the security of goods." For the provisions of

this Act regarding mercantile agents, see the Appendix,

where the whole of the Act is set out.

Brokers. — A Broker has been defined by Story as, " An

agent employed to make bargains and contracts in matters

of trade, commerce, or navigation, between other parties,

for a compensation, commonly called brokerage." But

though brokers are employed for these purposes, it must be

noted that all persons so employed are not properly speaking

brokers; e.g. auctioneers and commission agents. There

are various kinds of brokers, such as merchandise brokers,

stockbrokers, insurance brokers, shipbrokers, and bill-

]>rokcrs. A broker employed to sell goods has not, like a

factor, the possession of tlie goods.

AUTHORITY OF AGENTS. 29

As a general rule a broker has not any implied authority

like a factor, to contract in his own name — vide Baring v,

Gorvie (1818), 2 B. & Aid. 143.

Insurance brokers, however, can by reason of the pro-

visions of 28 Geo. III. c. 56, contract in their own names

—vide Bell v. Gilson (1798), 1 B. & P. 345, De Vignier

V. Swanson (1798), 1 B. & P. 346, and Browning v.

Provincial Insurance Company of Canada (1873), L. R.

5 P. C. 263. In the last case Sir M. Smith, delivering

the judgment of the Court, said ; " In England policies are

usually made in the name of the insurance broker, and it

was long ago decided that the broker need not be described

as agent, to enable the principal to sue upon them (see Be

Vignier v. Siuanson (1798), 1 B. & P. 346)."

It seems that, generally speaking, a policy of insurance

is effected by brokers in their own names for the benefit

either of a named principal, or of " whomsoever it may

concern ; " and that the action on a policy so effected may

be brought either by the principal for whose benefit it was

made, or by the broker who effected it.

In all cases where a broker is employed in a particular

trade or market, he has an implied authority to act in

accordance with the customs of such trade or market ; e.g.

he may by custom contract in his own name — vide Cropper

V. Cook (1868), 3 C. P. 194.

On the Stock Exchange, brokers always contract in

their own names, as the Stock Exchange does not recognize

in its dealings any one but its own members.

A broker, even though contracting for a named principal,

can of course, like any other agent, expressly contract in

such terms as to make himself personally entitled and

liable upon the contract.

A broker is primarily agent for the party who first