94. The jury found for the plaintiff on both points. Another point had been raised during the trial, viz., that the documents having been created by the factor himself, for the purpose of raising money, were not within the statute. His lordship was clearly of opinion that the statute only gave validity to pledges by a factor of documents intrusted to him by the real owner, and that it did not extend to the pledge of documents created, as in the present instance, by the factor himself.

In Janberry v. Britten (u), 1838, it was held that a pledge by a person holding goods for another was not within 6 Geo. 4, c. 94, where it did not appear on the pleadings that the goods were intrusted to him as agent for sale. So it was held in a subsequent case (x), that a possession of documents by a person in his own right is not within the statute. Nor is it sufficient for the holder of a document of title to goods to show that he is an in

nocent indorsee. Such documents must also have been [416*] *intrusted to the pledgor by the true owner, and must have been intrusted to him as agent (y).

Sect. 2 provides that any person intrusted with and in possession of any bill of lading, India warrant, dock warrant, warehousekeeper's certificate, wharfinger's certificate, warrant, or order for delivery of goods, is the true owner of the goods described in such document so as to make valid contracts for the sale or dispo sition of such goods, or for the deposit or pledge thereof, or any part thereof, as a security for any money or negotiable instrument advanced or given by him upon the faith of such document, provided the person who advances the money or gives the security has no notice that the person so intrusted is not the future [true] owner.

By the use of the word disposition, the legislature did not intend to give effect to any transaction which was neither a sale nor a pledge (z).

A deposit or pledge to come within the section must have been made for money, or the negotiator must have advanced or given upon the faith of the documents pledged (a).

(u) 5 Scott, 655.

1 See Covell v. Hill, 6 N. Y. 374. (x) Jenkyns v. Usborne, 7 Man. & G. 679 (1844).

(y) See per Baron Parke, Van Casteel

v. Booker, 18 L. J., Ex. 14.

(2) Taylor v. Trueman, 1 Mood. & M. 453; Taylor v. Kymer, 3 B. & Ad. 320. (a) Ibid.

The notice may be express or implied. It is sufficient notice if the circumstances would justify a reasonable man in inferring that the agent is not the true owner (b).

The 2nd section of 6 Geo. 4, c. 94, made an important alteration in the law, as by it the possession of bills of lading or other documents of title gave a power of selling or pledging the goods to those dealing bona fide with the possessor, beyond any which either by common law or by any provision of that statute the possession of the goods themselves gave. This solved one of the doubts expressed in Dyer v. Pearson (c), by enacting that the possession of the documents of title might enable the person so possessed to deal with others as if he were the owner of the goods. It was confined, however, to the possession by "persons intrusted with" these documents of title, on which words a construction was put in the two cases of Phillips v. Huth (d), and Hatfield v. Phillips (e).

The 5 & 6 Vict. c. 39, in consequence of these decisions, altered the law as to what should constitute intrusting.

*The 2nd section of 6 Geo. 4, c. 94, also contained a pro- [417*] viso that the purchaser or pledger had not notice by the documents' or otherwise, that the seller or pledger was not "the actual and bona fide" owner of the goods sold or pledged pledged―a proviso which, after the decision of Fletcher v. Heath (k), rendered it unsafe to make advances on goods or documents to persons known to have possession thereof as agents only. This also has been altered by 5 & 6 Vict. c. 39. In the 4th section of 6 Geo. 4, c. 94, the language used by the legislature is completely changed. It does not in this section give any power to pledge at all; nor does it use the language of the 2nd section, and authorize "any person intrusted with the possession of the goods," to sell them to anyone not having notice that this person is not the true owner; but it enacts that it shall be lawful to contract with "any agent"

(b) Evans v. Trueman, 1 Mood. & the factor is not sufficient, where the R. 10.

(c) Supra.

(d) 6 M. & W. 572.

(e) 9 M. & W. 647; 12 Cl. & F. 343. Per Blackburn, J., Cole v. North Western Bank, supra.

'The mere possession of the goods by

documentary evidence of title intrusted to him shows on its face that he is not the owner. Wilson v. Nason, 4 Bosw. 155; Covell v. Hill, 6 N. Y. 374; ante, p. 413, note.

(k) 7 B. & C. 517.

intrusted with any goods, or to whom they may be consigned, for the purchase of such goods, and to pay for the same to "such agent; " and such sale and payment is to be good, notwithstanding the purchaser has notice that the party selling or receiving payment is only an agent; provided such contract or payment is made in the usual course of business, a proviso which by itself alone shows that the legislature meant by the word "agent" only such agents as in the usual course of business sell goods for their principals and receive payments, such as factors, brokers, and did not mean to include bailees, warehousemen, carriers, and others who may in one sense no doubt be called agents, but who do not sell or receive payment for goods intrusted to them by those supplying them. It therefore solves the second doubt in Dyer v. Pearson (1) by declaring that if the evidence should be such as to show that the person in possession of the goods was intrusted as "an agent," a sale by him should bind the true owner (m).

But no person is to acquire a security upon goods in the hands of an agent for an antecedent debt beyond the amount of the agent's interest in the goods (n).

The 4th section makes it lawful for any person to contract with any agent "intrusted with any goods," and to receive such goods and pay for the same to such agent, and "such contract [418*] *and payment shall be binding upon and against the owner" notwithstanding such person shall have notice that the person making the contract is only an agent, “provided such contract and payment be made in the usual and ordinary course of business, and that such person or persons . . shall not when such contract is entered into or payment made, have notice that such agent or agents is or are not authorized to sell the said goods, ware or merchandise, or to receive the said purchase-money."

In construing this section, the two branches must be looked at. We first see whether the agent was of the species to which the act refers, and, secondly, whether the contract is made in the ordinary course of business by the party selling. As to what is meant by the term "agent," it was said by Mr. Justice Coltman, in

(n) Sect. 3; and see Fletcher v. Heath,

(1) Supra. (m) Per Blackburn, J., in Cole v. 7 B. & C. 517; Blandy v. Allan, 3 C. & North Western Bank, supra.

P. 447.

Baines v. Swainson (b): “I think the real meaning is this, that the person is to be intrusted qua agent, and that the great difficulty is to see what is the real meaning of the word 'agent.' There must be the relation of principal and agent; perhaps it does not apply to every case of principal and agent, and I cannot think that it applies whenever goods are given to a person ostensibly acting as factor. . We must look to see whether he is an agent intrusted with any goods, and the specific kind of agency intended. . . . I think the right view was taken by the ViceChancellor (c), when he says it must be a mercantile transaction." The section is not confined to the case of a factor who has authority to sell (d).

Where a person makes an advance, or gives security, with notice, his lien does not extend beyond the agent's interest (sect. 5). This section does not apply unless it appears that the principal was indebted upon the whole account between himself and the agent (e).

But the true owner is entitled to follow his goods while in the hands of his agent or of the assignee in bankruptcy, or to recover them from a third person upon repayment of advances (sect. 6).

In order that a purchase may be protected under 6 Geo. 4, c. 94, s. 4, it is not necessary that money should actually pass. *The section applies equally where the goods are [419*] transferred by the factor in consideration of an antecedent debt (f). The plaintiffs employed B. to sell blankets, and afterwards sent him a quantity on consignment and not on sale. B., being indebted to the defendant in a sum exceeding their value, sold them to him without disclosing the fact of his agency. The defendant had no notice of the agency. In an action brought to recover the value the Common Pleas Division held, on the authority of Carr v. Hinchliff (g), Ex parte Dixon (h), and similar cases, that the defendant was entitled to set off his debt. Grove,

J., cited Lord Mansfield's statement of the law in Rabone v. Williams, which was cited by Lord Kenyon in George v. Claggett (i), to the effect, that "where a factor dealing for a principal, but

(b) 32 L. J., Q. B. 281.

(c) Wood v. Rowcliffe.

(d) Ibid.

(e) Robertson v. Kensington, 5 M. & R. 381.

(ƒ) Thackrah v. Fergusson, 25 W. R. 307.

(g) 4 B. & C. 547.

(h) L. R., 4 Ch. Div. 133.

(i) 7 T. R. 359.

concealing that principal, delivers goods in his own name, the person dealing with him has a right to consider him to all intents and purposes as the principal; and though the real principal may appear and bring an action upon that contract against the purchaser of the goods, yet that purchaser may set off any claim he may have against the factor in answer to the demand of the principal. This principle runs through a great number of decisions (k).

The 5 & 6 Vict. c. 39, commences with a preamble, and though the enacting part may either go further than or fall short of effecting what is recited in that preamble as being the object of the legislature, that preamble is of great importance. It first recites that, under 6 Geo. 4, c. 94, "In the present state of the law, advances cannot safely be made upon goods or documents of title to persons known to have bought of agents only." This points to Fletcher v. Heath (1), and shows an intention to alter the law as there decided. It then recites that "advances on the security of goods and merchandise have become an usual and ordinary course of business, and it is expedient and necessary that reasonable and safe facilities should be afforded thereto, and that the same protection and validity should be extended to bona fide advances upon goods and merchandise as by the said recited act is given to sales; and that owners intrusting agents with the possession of goods and merchandise, or of documents of title thereto, [420*] should in all cases where such owners *by the said recited act or otherwise would be bound by a contract or agreement of sale, be in like manner bound by any contract or agreement of pledge or lien for any advance bona fide made on the security thereof."

This recital shows a plain intention to enact that what had ever since the case of Paterson v. Tash (t) been the law, should no longer be so; and that an agent having power to sell should be also enabled to pledge. But there is no indication of any intention to give a power to pledge where there is not a power to sell; nor to extend the power to sell beyond that which by the common law and 6 Geo. 4, c. 94, s. 4, was given; nor to alter the construction put upon that enactment by Monk v. Whittenbury (u).

(k) See Sect. I of this chapter.

(1) 7 B. & C. 517.

(t) 2 Str. 1178.

(u) 2 B. & Ad. 484. Per Mr. Justice Blackburn in Cole v. North Western Bank, L. R., 10 C. P. 369, 370.