had succeeded, or to any one to whom he might thereafter succeed. In examining the titles, it may turn out that part of the estate was not fully vested in the father, so that service to another predecessor is indispensable; and the succession to some other person may happen to devolve on the constituent when he is at a distance, and when it will be important that the factor should have power to act at once, and without waiting for a new power. The same amplification may be found advisable as to several other of the special powers of a comprehensive factory or commission. OF FACTORY. The factory may be terminated by the constituent at any time, either TERMINATION by a formal recal, or by granting a factory with the like powers, or for the same purposes, to another party, which will imply and operate revocation. And, even while the factory subsists, the constituent has in himself full power to act; the factory not being a divestiture in any sense. And if the constituent, by himself, transacts a claim which he had given his factor express power to settle for him, not only will the constituent's act be effectual (assuming always that the factor has not already done anything to create a mid-impediment), but the constituent's acting for himself will terminate the factory, in so far as applicable to the claim so transacted. In the case of Walker,1 the factor's right to establish a claim against his constituent for outlay and trouble, arising whilst he was acting in his factorial capacity, was reserved. But, where third parties are interested, the act or deed of the constituent will not supersede or render ineffectual the preceding act or deed of the factor actually done in the bond fide exercise of the powers given by the factory. This was strongly illustrated in a case where the factor had power to present ministers to vacant churches, of which his constituent was patron. In virtue of that power, the factor issued a presentation in favour of a qualified party. The constituent, who was on the Continent at the time, granted a presentation to another party equally qualified. The constituent's presentation was dated two days after that by the factor, but both were laid before the presbytery at the same time; and for the purpose of prosecuting the settlement of the new minister, and of filling up the vacancy in the parish, the one was in as good time as the other. But the Court of Session and House of Lords preferred the factor's presentee, because he had obtained his presentation two days before the interference of the constituent.2 The constituent's inherent power to recal a factory is strongly shown in the case of Heddrington.3 In that case, a factory was granted by two of the three partners in a mineral lease to the third partner, to subsist during the lease, or for his life. He proved unfit for his duties; whereupon his copartners recalled his factory, and named a new factor, intimating in a public manner that they had done so. The Court found. that the factory could be revoked for just causes, and that the publica1 Walker v. Somerville, 13 Dec. 1837, 16 Sh. 217. 2 Keith v. Tait, 30 March 1778, 2 Paton's App. 447. 3 Heddrington . Book, 14 July 1724, M. 4047. BANKRUPTCY. INCAPACITY. DEATH OF CON- RESIGNATION OF FACTOR. tion of the new factory was sufficient for that purpose. But where a father had named tutors to his children, and at the same time had appointed a factor to act in the management of the estate, which devolved upon his eldest son and heir, during the heir's pupillarity and minority, the Court held the factory a qualification of the tutory, and would not sanction a recal thereof by the tutors, unless malversation was alleged against the factor. An arrangement of that nature, it should be observed, is almost unknown, and is very objectionable. Parties holding the difficult and responsible office of tutors should have full control over all the agents employed in managing the pupil's estate. Factories also fall by the bankruptcy of the constituent. But, where a mercantile factor had lawfully incurred liabilities for his constituent, the Court held him entitled, after his constituent's bankruptcy, to sell goods previously consigned to him for sale, in order to reimburse himself of his advances; being of opinion that his commission to sell such consigned goods could only be revoked by instant repayment of advances, or relief of liabilities.2 Factories also fall by the supervening incapacity of the constituent, But, apparently, the law would protect third parties bona fide contracting with the factor, in ignorance of the incapacity; though that point is not settled.3 5 As a general rule, the powers of factors cease by the death of their constituents; or, if the constituents are a body of trustees, tutors, or others acting jointly, and whose office ceases by the death of any one of their number, the factory likewise will fall by the death of any one of them.* The factor, however, is entitled to act until he receives authentic accounts of his constituent's death. And a special protection is given by the Merchant Shipping Act, sect. 76, to the acts done by a person empowered by certificate of sale or mortgage, in the form authorised by that Act. But if, as in Campbell's case, rumours of the constituent's death have been current, any actings should be of the most limited kind till the real truth be known. The factory may be resigned by the factor; but if he is a sole factor, or if his resignation will terminate the factory, he must be careful, before ceasing to act, that his constituent has proper notice of his intention, and opportunity to make such arrangements as the circumstances may require; otherwise he may be exposed to a claim for damages, arising from a precipitate resignation. One of two or more factors, though entitled to act separately, should also take care not to embarrass his co-factors by resignation, without reasonable notice or clear and sufficient occasion. 1 Walkinshaw v. Gray, 9 December 1743, M. 4049. 2 Broughton v. Stewart, Primrose, & Co., 17 Dec. 1814, F. C. 3 Pollock v. Paterson, 10 Dec. 1811, F. C. 4 Stewart v. Baikie, 29 Feb. 1832, 10 Sh. 392; as reversed, 7 April 1834, 7 5 Campbell v. Anderson, 7 Dec. 1826, 5 Sh. 86; affirmed 1 May 1829, 3 Wil. & Sh. App. 384. 6 17 & 18 Vict. cap. 104. 7 Menzies, p. 474. The factory falls likewise by the incapacity of the factor, or by his death; or, if there are two or more factors who require to act jointly, by the resignation, incapacity, or death of any one; and, if there is a sine quo non, the factory will fall by his resignation, incapacity, or death. Practically, factories will in many cases fall by the bankruptcy of the factor, though that does not appear to be always a necessary consequence. 1 OF FACTOR. It has been held that the office of factor has been presumed to be REMUNERATION gratuitous when there is no mention of remuneration in the factory.1 When an allowance is to be made, but the rate or amount is not fixed, and parties cannot agree on it, the Court will settle it; and their decision will depend on the circumstances of each case. A testamentary trustee, however, acting as factor for himself and his co-trustees, is not entitled to any salary or allowance, unless provision for his remuneration is made. in the trust-deed and factory.2 In accounting for money received, factors who have right to salary or allowances are entitled to retain the amount thereof, as also their outlay in the factory-business. But a factor who pays debts due by his constituent, without his constituent's authority, is not entitled to retain such debts out of sums coming to him as factor. He is just in the position of an ordinary assignee to the debt paid. For securing to him his proper position as an assignee, he should obtain an assignation of the debt to himself, not a discharge to the debtor, his constituent. The factor, by accepting his office, becomes liable to fulfil its duties; LIABILITY OF but the nature of his liability varies, according as he is to be remunerated FACTOR. or not. If his office is gratuitous, the general rule is that he is liable for intromissions only, and not for omission to do exact diligence. If, on the other hand, he is to be paid for his trouble, he is liable for loss arising through neglect of duty. In the case of Goldie, a factor, specially authorised to expede confirmation in favour of his constituent as executor of a person deceased, for vesting in his constituent the deceased's personal estate, neglected to do so. His constituent died, and, in consequence of the factor's neglect to expede the confirmation, the personal estate in question did not become vested in him, and did not fall under his will. His widow suffered damage in consequence, which the factor was held bound to make up. As regards personal estate, the same thing could not now happen, owing to a change in the law; but the case might apparently occur in reference to heritable estate, should any one be able to instruct damage through a factor's neglect to make up his constituent's title, when specially empowered and instructed to do so.a The factory, however, may declare the factor exempt from liability 1 Orbiston v. Hamilton, 17 Feb. 1736, M. 4063. 2 Wellwood's Trustees v. Boswell, 17 Dec. 1856, 19 D. 187. 3 Douglas v. Sommervill, 24 July 1678, 4 Goldie v. M'Donald, 4 Jan. 1757, M. a Since the passing of the Conveyancing Act of 1874, this could not happen as to heritable estate, as a personal right to land now vests without service. CLAUSE OF INDEMNITY TO PARTIES FACTOR. for neglect, and bind him only to account for his actual intromissions, even if he is to have remuneration; and in a case where the factory was so framed, and where it was alleged, but not proved, that loss arose in consequence of delay on the factor's part, the Court refused to hold the factor liable. There were various circumstances, however, in this case, favourable to the defence of the factor against the claim of liability; and the effect which the Court would allow to any clause of the above nature would depend on the circumstances of each case. There may be such neglect as to subject a factor, even with such a clause of immunity, in liability for loss through his carelessness. Where, however, the factor gave notice to his constituent that he was not doing diligence, and stated his reasons, and the constituent gave no orders to do diligence, but left it to the discretion of the factor to do diligence or not, it was found that the factor was not to be regarded as having been negligent, merely because the debtors eventually proved insolvent. The case of M'Caul points out the practical course to be followed when there is opportunity. Indeed factors ought, as much as possible, to obtain and follow instructions, and use their factory as a means of carrying out instructions, not of independent action. The factory ought to contain a clause of indemnity to third parties, relieving them of all concern with the factor's obligations to his constiDEALING WITH tuent; and specially, when power to sell lands, or to borrow money, is given, care should be taken to free the purchaser or lender of all occasion to inquire whether the sale or loan was truly necessary, or in what way the price or money lent was applied. These powers should, in their terms, be committed wholly to the discretion of the factor, leaving the necessity for their exercise, and the disposal of the proceeds, to be settled between the constituent and him. But powers of such extent REGISTRATION OF FACTORY. are unusual. A factory and commission, when acted upon, ought to be recorded for preservation. It is then an essential part of a voucher, or of the title to an estate, or to a lease, or as the case may be. And, as it cannot be delivered by the factor to any of the parties with whom he transacts, its registration is necessary for the security of those who transact with the factor, and also for the protection of the factor, as showing that he had the powers which he exercised. Of course the constituent or factor is bound to make the factory, or a probative extract of it, forthcoming to all who have transacted with the factor, on every necessary occasion. 1 Fraser's Trustees . Falconer, 14 Dec. 1830, 9 Sh. 178. 2 M'Caul v. Vareils, 8 Feb. 1740, M. 3524. TITLE VII. BILLS AND PROMISSORY-NOTES.1 CHAPTER I. WE are now, in further pursuance of the plan of this course, to enter on the consideration of the large and important subject of Bills and Promissory-Notes. These writings are so peculiar in their forms, solemnities of execution, modes of transmission, and privileges, as to form a distinct and separate class of instruments. Being strictly personal in all respects, they fall under the first leading division of the course; and I have thought it convenient to consider them immediately before the subject of Personal Diligence, of which they are now, more than any other writings, the foundation and warrants. Mr. Thomson, in the preface to his valuable work on the Law of Bills of Exchange, informs us that the history of these documents is involved in great obscurity, but that in all those nations among which they have come into complete effect their progress has followed the course of commerce. Professor Bell in his Commentaries' says, 'The only circumstance in their history which is of much consequence to point out is, that as a branch of practical jurisprudence, or as a circulating medium in trade, bills of exchange were unknown to the Romans; that without 'their aid foreign trade cannot proceed to any great extent; and that this affords one of the best proofs of the remarkable difference between 'the state of trade in ancient and modern times.' You will find some other interesting particulars, both as to their origin and history, in Blackstone's Commentaries and Professor Menzies' Lectures.* But, whatever be their origin, they are now, from their extensive use, the various purposes to which they can be applied, and the patrimonial interests connected with them of great and increasing importance all over the world. In regard to the amount of the money actually contained in them, it is difficult to form a correct estimate, more especially as the uniform duty of one penny is so largely employed for bills viewed as a circulating medium, whatever sum may be contained in the bill. But 1 The books to be referred to on this subject are,-Bell's Commentaries; Thomson on Bills of Exchange; Chitty; and Byles. Our institutional writers are now a good deal out of date on this great branch; and we may rely on finding, in the writers above 2 Bell's Comm. i. 386. |