The true definition of a broker, it has been said, is that he is an agent employed to make bargains and contracts between other persons in matters of trade, commerce, or navigation. A broker is a mere negotiator between the other parties. If the contract which the broker makes between the parties is a contract of purchase and sale, the property in the goods, even if they belong to the supposed seller, may or may not pass by the contract. Whatever may be the effect of a contract as between the principals, in either case no effect goes out of the broker. If he signs the contract, his signature has no effect as his; but only because it is, in contemplation of law, the signature of one or both of the principals: no effect passes out of the broker to change the property in the goods. When the goods sold are in existence the broker now frequently passes a delivery order to the vendor to be signed, and on its being signed he passes it to the vendee. In so doing he still does no more than act as a mere intervener between the principals. He himself, as broker, has no possession of the goods;2 no power, actual or legal, of determining the destination of the goods; no power or authority to determine whether the goods should be delivered to buyer or seller, or either. He is throughout merely the negotiator between the parties. Provided the broker acts as broker, and makes no contract in his own name, he Stone, 14 N. Y. 267; Wolff v. Koppel, 5 Hill, 458; S. C. 2 Den. 368; Milliken v. Byerly, 6 How. Pr. 214; Wickham v. Wickham, 2 K. & J. 486; Couturier v. Hastie, 8 Exch. 40; Heubach v. Mollman, 2 Duer, 227. See post, p. 5. Del credere guaranties are not within the Statute of Frauds. Couturier v. Hastie, 8 Exch. 40; Wolff v. Koppel, 5 Hill, 458; S. C. 2 Den. 368; Swan v. Nesmith, 7 Pick. 220; Bradley v. Richardson, 23 Vt. 720. 'Saladin v. Mitchell, 45 Ill. 79; Beal v. McKiernan, 6 La. (O. S.) 407; Graham v. Duckwall, 8 Bush. 12; Hinckley v. Arey, 27 Me. 362, 364. For some purposes he is treated as the agent of both parties. Saladin v. Mitchell, supra. The authority of a mere broker em 3 ployed to sell real estate, is limited to the power of finding a purchaser satisfactory to the principal; but if the language of the principal used in making the employment, clearly shows that he intended to give the agent a power more extensive than that of a mere broker, and to authorize him to make a written memorandum of sale, the court will so find, and will enforce the written contract made by him. Rutenberg v. Main, 47 Cal. 213. Saladin v. Mitchell, 45 Ill. 79. 3 The right of a broker to make a sale of property for another, does not include the right of such broker to rescind the same without the knowledge or consent of his principal, unless the commercial usage was such at the place where the sale was made. Saladin v. Mitchell, 45 Ill. 79. cannot be sued by either party to the contract for any breach of it (ƒ). An agent who merely negotiates a personal contract for work and labour is not a broker (g). According to the business in which they engage, brokers are *called exchange brokers, stockbrokers, merchandize [4*] brokers, ship brokers, and insurance brokers. The distinction between a broker and factor has been thus stated by Chief Justice Abbott, in the well-known case of Baring v. Corrie (h): "The distinction between a broker and factor is not merely nominal, for they differ in many important particulars. A factor is a person to whom goods are consigned for sale by a merchant residing abroad, or at a distance from the place of sale, and he usually sells in his own name, without disclosing that of his principal. The latter, therefore, with full knowledge of these circumstances, trusts him with the actual possession of the goods, and gives him authority to sell in his own name. But the broker is in a different situation he is not trusted with the possession of the goods, and he ought not to sell in his own name." To the same effect Mr. Justice Holroyd observed, in the same case, that a factor "is a person to whom goods are sent or consigned, and he has not only the possession, but, in consequence of its being usual to advance money upon them, he has also a special property in them, and a general lien upon them. When, therefore, he sells in his own name, it is within the scope of his authority, and it may be right, therefore, that the principal should be bound by the consequences of such sale- amongst which the right of setting off a debt due from the factor is one. But the case of a broker is different; he has not the possession of the goods, and so the vendee cannot be deceived by that circumstance; and besides, the employing of a person to sell goods as a broker does not authorize him to sell in his own name. If, therefore, he sells in his own name, he acts beyond the scope of his authority, and his principal is not bound."2 (f) See per Brett, J., Fowler v. Hollins, L. Rep., 7 Q. B. 616. a debt due from the broker to him against the demand for the goods made 'As to the liability of agents to third by the principal. Baring v. Corrie, parties, see post, 299. Where a broker sells goods without disclosing the name of his principal, inasmuch as he acts beyond the scope of his authority, the buyer cannot set off supra; Evans v. Waln, 71 Penn. St. 69. (g) See Milford v. Hughes, 16 M. & W. 177; per Rolfe, B. (h) 2 B. & Ald. 143. Saladin v. Mitchell, 45 Ill. 79. All brokers who act as brokers within the city of London or the liberties thereof must be previously admitted by the court of mayor and aldermen (i), under a penalty of 1007. (k). For the construction put upon the term "broker" by these acts reference may be made to the following cases: Scott v. Cousins (1), Clark v. Powell (m), Scott v. Jackson (n), Smith v. Lindo (0), Gibbons v. Rule (p), Wilkes v. Ellis (q), Milford v. Hughes (r). [5*] *An insurance broker "is agent for the assured, and also for the underwriter. He is agent for the insured, first in effecting the policy, and in everything that has to be done in consequence of it; then he is agent for the underwriter as to the premium, but for nothing else; and he is supposed to receive the premium from the insured for the benefit of the underwriter; but the whole account with respect to the premium, after the insurance is effected, remains a clear and distinct account between the underwriter and broker." Exclusive of fraud, and other similar circumstances, there is an end to everything with respect to the premium as between the insurer and insured (s).1 (i) 6 Am. c. 16, s. 4. Insurance companies who do busi (k) 57 Geo. 3, c. 60, s. 2; and see 33 ness by agencies at a distance from their & 34 Vict. c. 60. () L. R., 4 C. P. 177. (m) 4 B. & Ad. 846. (n) 19 C. B., N. S. 134. (0) 4 C. B., N. S. 395. (p) 4 Bing. 301. (q) 2 H. Bl. 555. (r) 16 M. & W. 174. (s) Per Mansfield, C. J., in Minett v. Forrester, 4 Taunt. 541, note. 'So far as an insurance agent acts as an insurance broker, he is agent for the insured and not for the insurer. Hartford Fire Ins. Co. v. Reynolds, 36 Mich. 502. An insurance broker employed by a party to effect insurance for him may be regarded by the insurer as clothed with full authority to act for his principal in procuring, modifying or canceling policies, and his acts in these respects are binding upon his principal. Standard Oil Co. v. Triumph Ins. Co. 64 N. Y. 85. principal place of business are responsible for the acts of their agents within the general scope of the business intrusted to their care, and no limitations of their authority will be binding on parties with whom they deal, which are not brought to their knowledge. Hence, when these agents, in soliciting insurance, undertake to prepare the application of the insured, or make any representations to the insured as to the character or effect of the statements of the application, they will be regarded in doing so as the agents of the insurance company and not of the insured. Union Mut. Ins. Co. v. Wilkinson, 13 Wall. 222; N. A. Fire Ins. Co. v. Throop, 22 Mich. 146; Franklin v. Atlantic Fire Ins. Co. 42 Mo. 456; Woodbury Savings Bank v. Charter Oak Ins. Co. 31 Conn. 517. See, also, Pierce v. Nashua Fire Ins. Co. 50 N. H. 297. See, however, Winnesheik Ins. Co. v. Holzgrove, 53 Ill. 516. The distinction between a del credere agent and a vendee was strongly insisted upon in Ex parte White, re Nevill (t),1 which was decided in 1870. This case decides (1.) That a consignee who is at liberty, according to the contract between him and the consignor, to sell at any price he likes, and receive payment at any time he likes, but is bound, if he sells the goods, to pay the consignor for them at a fixed price and a fixed time, is not a del credere agent. (2.) That an assumption on the part of the consignor and consignee that the relation subsisting between them is the relation of principal and agent, affords no evidence of the existence of such a relation, if the course of dealing between them is not consistent with the existence of such relation. (3.) There is a distinction between a del credere agent and a consignee who is an agent until he has sold the goods, but who, when he has sold the goods, has purchased them on his own credit, and sold them again on his own account. In Ex parte White (u), a partner in the firm of A. and Co. was in the habit of receiving goods on his private account from B. and Co., accompanied by a price list. No restriction was placed upon A. in selling the goods, but he sent a monthly account of his sales to B. and Co., debiting himself with the price named in the price list. In paying B. and Co., no reference was made to the price at which the goods were sold by A. He bought the goods on his own credit, and sold on his own account. "It is quite clear," said Lord Justice Mellish, "that A., if he sold these goods, was to pay B. and Co. for them at a fixed price that is to say, a fixed price beforehand between him. and *them — and also at a fixed time. Now, if it had been his [6*] duty to sell to his customers at that price, and to receive payment from them at that time, then the course of dealing would be consistent with his being merely a del credere agent, because I apprehend that a del credere agent, like any other agent, is to sell according to the instructions of his principal, and to make such contracts as he is authorized to make for his principal, and he is distin In such cases the insurers can not protect themselves under instructions to their agents that they are only agents for the purpose of receiving and transmitting the application and the premium. Union Mut. Ins. Co. v. Wilkinson, supra. (t) L. R., 6 Ch. 397. 1 See ante, p. 3. 'An agent selling on a del credere commission, receives an additional consideration for extra risk incurred, but he is not thereby relieved from any of the guished from other agents simply in this, that he guarantees that those persons to whom he sells shall perform the contracts which he makes with them; and, therefore, if he sells at the price at which he is authorized by his principal to sell, and upon the credit which he is authorized by his principal to give, and the customer pays him according to his contract, then, no doubt, he is bound like any other agent, as soon as he receives the money, to hand it over to the principal. But if the consignee is at liberty, according to the contract between him and his consignor, to sell at any price he likes, and receive payment at any time he likes, but he is to be bound, if he sells the goods, to pay the consignor for them at a fixed price and a fixed time, in my opinion, whatever the parties may think, their relation is not that of principal and agent. He is not guaranteeing the performance by persons to whom he sells of their contract with him, which is the proper business of a del credere agent; but he is to undertake to pay a certain fixed price for those goods, at a certain fixed time, to his principal, wholly independent of what the contract may be which he makes with the persons to whom he sells; and my opinion is, that in point of law, the alleged agent in such a case is making, on his own account, a contract of purchase with his alleged principal, and is again reselling." The case is, of course, still clearer if the consignee be allowed to change the character of the goods; e. g., to grind corn, or dye or bleach goods. 1 In Ireland v. Livingstone (v), the defendant wrote to the plaintiffs, who were commission agents at Mauritius, "You may ship obligations of an ordinary agent as to receiving payments on account of his principal. An agent, whether acting on a del credere commission or not, is only authorized to receive payment in cash, in the absence of any practice or custom to the contrary. Catterall v. Hindle, L. R. 1 C. P. 186; reversed and a new trial granted in 2 id. 368, on the ground that the question of the existence of a custom of trade was not left to the jury. See, also, Dunnell v. Mason, 1 Story C. C. 543. 1So, in Ex parte Flannagans, 12 Nat. Bank. Reg. 230, it was held, that a con signment of goods under a special contract, in which the consignee gives his acceptances for their value, payable partly at sight and partly at a future day, and agrees to account for the whole price, to guarantee the sales, and to receive a commision of ten per cent., with other stipulations making him primarily liable for the price of the goods, was a consignment on sale, as distinguished from a consignment on a del credere guaranty. (v) L. R., 2 Q. B. £9; 5 ibid. 516; and L. R., 5 E. & I. Ap. 305. |