And where a broker, having accepted bills for his principal on the security of goods then in his hands, pledged the goods with a person who had notice of the agency, but did not inform the principal of the transaction; it was held, that under this section the broker could only transfer such right as he had, which was a right to be indemnified against the bills he had accepted; and that the principal, having satisfied those bills, was entitled to have back his goods from the pawnee, without paying the amount for which they were pledged (e).

And so also where a factor, under acceptances for his principal, which were provided for by the latter before they became due, pledged documents for the delivery of goods belonging to his principal, as a security for advances; it was held, that the pledgee had no right under the Factors' Acts, 4 Geo. 4, c. 83, s. 2, and 6 Geo. 4, c. 94, s. 5, to retain them against the owner (ƒ).

The right of a factor, under section 5 of the latter statute, to pledge the goods of his principal, depends upon the question whether, upon the face of the whole account between them, the principal is indebted to the factor.

A factor, by desire of his principal, kept separate accounts of sales, in some of which the principal was solely, and in others but partly, interested; but he regularly posted all the items of both those accounts into one general account. The factor pledged goods consigned to him on the joint account for the purpose

(e) Fletcher v. Heath and others, 7 B. & C. 517.
(f) Blandy v. Allan, Dan. & Lloyd Merc. Ca. 22.

of meeting a draft drawn on him by his principal against that account. At the time of the pledge, the factor, upon the general account, was indebted to his principal in a larger sum than the amount of the draft; but upon separate account, against which the draft was drawn, and to which the goods pledged belonged, the principal was indebted to his factor; it was held, that the factor had no right to pledge, and that the pledgee could not retain the goods against the principal (g).

Where, in such a case, the principal, for some time after notice of the pledge, forbore to make any demand upon the pledgee, it was held, that such forbearance was not an acquiescence in the pledge; and that, in the absence of any evidence to show that the effect of such forbearance had been to alter the situation of the pledgee for the worse, or that of the principal for the better, the right of the principal against the pledgee remained entire (g).

Protection afforded to sales of goods by agents intrusted, extended to bonâ fide pledges thereof.

The provisions of the previous statutes (h) having been found inadequate to the requirements of the mercantile community, inasmuch as advances could not, safely, be made upon goods, or documents of title to goods, to persons known to have possession thereof as agents only; another statute was passed, known as the Factors'

(g) Robertson v. Kensington and another, 5 Man. & Ry. 381.
(h) 4 Geo. 4. c. 83, 6 Geo. 4, c. 94.

Act, 1842 (¿), which recites that advances on the security of goods and merchandise had become a usual and ordinary course of business, and that it was 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 (6 Geo. 4, c. 94) is given to sales, and that owners intrusting agents with the possession of goods and merchandise, or of documents of title thereto, 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 advances bond fide made on the security thereof.

Agent "intrusted" is to be deemed owner, as regards validity of pledges.

It was therefore enacted that any agent who should be intrusted with the possession of goods, or of the documents of title to goods, should be deemed and taken to be owner thereof, so far as to give validity to any contract or agreement by way of pledge, lien, or security bona fide made by any person with such agent so intrusted as aforesaid; as well for any original loan, advance, or payment made upon the security of such goods or documents, as also for any further or continuing advance in respect thereof; and that such con

(i) 5 & 6 Vict. c. 39. This Act is extended to India by the Act of the Indian Legislature, No. XX., of 1844.

tract or agreement should be binding upon, and good against the owner of such goods, and all other persons interested therein, notwithstanding that the person claiming such pledge or lien may have had notice that the person with whom such contract or agreement was made was only an agent (k).

So that, since the passing of the Factors' Act, 1842, bona fide advances upon the security of goods, or documents of title to goods, to agents intrusted with the possession of such goods, or of the documents of title. thereto, have been protected, although at the time of making the advance the pledgee knew that the pledgor was only an agent. But under the previous statute such advances could not have been safely made to persons who were known to have possession as agents only ().

And a bona fide pledgee may now also have a valid security upon the pledge of such goods, or documents of title, by an agent intrusted as aforesaid, for a further or continuing advance; which he could not have had under the former statute (m).

And where an agent obtains, by fraud, the trust bestowed upon him by his principal, he is nevertheless "an agent intrusted with goods" within the meaning of the Factors Act, 1842 (n), so as to enable him to make a valid pledge of the goods with a third

(k) 5 & 6 Vict. c. 39, s. 1.

(7) 6 Geo. 4, c. 94; Phillips v. Huth, 6 M. & W. 572; Hatfield v. Phillips, 14 M. & W. 665.

(m) Taylor v. Trueman, M. & M. 453; Taylor v. Kymer, 3 B. & Adol. 321.

(n) 5 & 6 Vict. c. 39, s. 1.

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party; such pledgee being without notice of the agent's fraud (0).

And a merchant who has enabled his factor to raise money fraudulently can claim no redress against the party who has bona fide made the advance (p).

And although the employment as agent be an isolated transaction, and not in the ordinary course of the agent's business, still, if the character of the transaction be the same as one in the ordinary course of an agency business, it will be within the statute.

And so, where one Inman, whose ordinary occupation was not that of selling goods on commission, but, to obtain business for two insurance offices, was intrusted by the defendant with the care of some pictures, and either then or shortly afterwards the defendant directed him to sell them; under which employment Inman continued to hold them, and during such possession, in fraud of the defendant, pledged the pictures to the plaintiff, who, as far as appeared, was ignorant of the fraud. The defendant having retaken the pictures, it was held, that at the time of the pledge the pictures were in the possession of Inman as an agent intrusted within the meaning of the Factors' Act, 5 & 6 Vict. c. 39, s. 1; and that therefore the plaintiff was entitled to hold them as against the defendant, until his loan was repaid (9).

But where the plaintiff, a manufacturer, having con

(0) Sheppard v. Union Bank of London, 31 L. J. Ex. 156; and see Baines v. Swainson, 4 B. & S. 270, 32 L. J. Q. B. 281, supra, p. 51. (p) Vickers v. Herts, L. R. 2, H. L. Sc. & Div. Ap. 113. (q) Hayman v. Flewker, 13 C. B. N. S. 519, 32 L. J. C. P. 132.