fendants from acting as they judged best for their 3 Espinasse, 182, Pultney v. advantage and reimbursement. If a broker have no notice that the party he is dealing with is an agent, he will, as between broker and principal, have a lien for his general balance with the agent, but it is otherwise if he be apprised of the situation of the agent. Keymer. Thus, in a case where notice had not been given, and the broker had advanced a sum of money upon a policy of insurance, he was held justified in deducting his general balance with the agent from the proceeds; and Lord Ellenborough said, that this might be done before or after a communication of the principal's interest in the instrument; but it was further decided, that when the broker had 4 Campb. 60, satisfied himself, he was bound to hand over the balance to the principal, and not to the assignees of the agent. 66 Mann v. For rester. "I hold," said Lord Chief Justice Gibbs, "that if 4 Campb. 352. a policy of insurance is effected by a broker, in ignorance that it does not belong to the persons by "whom he is employed, he has a lien upon it for the amount of the balance which they owe him. In this case, the agent has misconducted himself, and is "liable for not disclosing that he was a mere agent in "the transaction; but the defendants [sub-brokers], who "had every reason to believe that he was the principal, "are entitled to hold the policy." And so where one employed a broker to effect an insurance, and the broker, representing himself as the principal, accomplished this through a medium of another person, that third person was considered to have a lien 4 Campb. 349. on the policy for his general balance against the bro- Westwood v. ker (o). But where an English subject, in time of war, opened a policy in his own name with his broker, but (0) See 2 Campbell, 597, Lanyon v. Blanchard, and Montagu on Lien, p. 67, note n. Bell. 1 East, 335, Maanss v. Henderson. 2 Campb. 597, Lanyon v. Blanchard. Ibid. Id. 218, Snook v. Davidson. told him at the same time that it was neutral, the Court held this indication sufficient to show that the principal's property in the policy had been disclosed, and a claim, therefore, for the general balance due from the agent to the broker was disallowed. So where tallow had been insured, and the agent represented that he had authority to indorse the bill of lading, the defendant was not permitted to retain for this agent's general balance due to him; and Lord Ellenborough said, "if "an agent represents himself to have a power which is "not entrusted to him, his principal is not bound by "his acts. The person who gives faith to the repre"sentations of the agent, must run the risk of their being true or false" (p). So where an insurance broker, being directed to effect polices, went to the defendant, without the knowledge of his employer, and transacted the business, saying, that the policies were for a correspondent in the country, the general lien was objected to; and by Lord Elleuborough, addressing himself to the counsel for the defendant, the sub-broker: "there is no privity between 66 you and this party: a sub-agent, employed as the "defendants were, cannot acquire the broker's general "lien." So a book-keeper in Smithfield, who received money for beasts sold, conceived that he had a right to retain against the drover upon the event of the salesman's insolvency; but the Court denied the claim, saying that almost (b) It must be confessed that this decision may be said to clash with that of Chief Justice Gibbs. The ground of distinction suggested here is one adopted by Mr. Montagu, who says, " the representation by the shipper, "that he had authority to indorse the bill of lading, seems "to imply that the insurance was not effected by the shipper on his own account." On Lien, p. 67. note n. 177, Goode v. the office-keeper knew he was receiving this money for Peake's Cases, the drover's use, and judgment was given for the prin- Jones. cipal. We have seen that liens are not in their nature assignable; and so," if a servant deliver cloth to a taylor to "make his master's liveries, the taylor indeed will have Lord Ellenbo McCombie v. a lien on the cloth for the value of his work; but 9 East, 432, by "though the servant pay the taylor his charge, that will rough. "not give the servant a lien on the liveries." So, if a broker tortiously pledge his principal's goods as his own, the pawnee may not retain against the principal 7 East, 5, for the broker's general balance with such principal. Davies. The late statute, regulating pledges and contracts by factors, allows the person who advances his money, to keep the goods till he has been satisfied to the extent of his loan, and this, with or without notice that the property belongs to another. Liens are sanctioned in favour of personal representatives as well as against them; and therefore, when the administratrix of a deceased solicitor was applied to to deliver up certain papers belonging to a cause in which her husband had been concerned, and she refused so to do until security given for the costs which had been incurred, the Lord Chancellor refused a motion to compel her, the proceedings in the cause being stayed, not by the default of any party, but by Bolton v. Tate. the act of God. 1 Swanston, 84, Lien against As a general rule, there is the same right of lien against the assignees which existed before the bankruptcy; so that the possession of a bond with notice to 1 Term Rep. the obligor, gives a good title against his assignees. 619, Winch v. And so, where a policy of insurance was in the broker's Keeley. hands at the time of the bankruptcy, it was considered that he had a lien upon the money received from the underwriters. So, again, a factor, becoming surety for his principal, has a lien upon the price of goods sold by him; and in a case where he had parted with the actual R Cowper, 251, 4 Maule & Sel. Montagu, p. 74; Ibid. 2 Campb. 48, Jackson v. Irvin. Croke, Car.148, Audley v. Halsey. possession of the goods, yet as he had the power of giving a discharge, it was held, that the proceeds were bound in his hands to satisfy him to the extent of his suretyship. But the transaction should be complete at the time of the failure, for if the person who would be entitled to his lien neglect to reduce the property into his possession, the assignees will clearly have a right to claim it. And the Court will be slow to interfere for the benefit of parties who have been thus negligent. "We are very unwilling, at all times, to "interfere with the rights of parties which have accrued by bankruptcy," said Lord Ellenborough. Hence, if a creditor possess a security of any kind, by judgment, recognizance, &c. but there be not any execution or extent sued out against the bankrupt's estate, there is no lien. Thus, the teste and delivery of a fi. fa. to the sheriff is not sufficient, but a seizure, as it reduces the effects into possession, immediately confers the right. There being no bound bailiffs in Cumberland, certain bankers there gave a writ of fi. fa. to two of the bankrupt's servants, he being their debtor; but it was held, that the bankruptcy overrode the execution, for the possession of the servants could not, in point of law, be aliene to that of the master. The principle rests upon a possession adverse to the order and disposition of the bankrupt; and so, where goods were taken upon an extent three days before an act of bankruptcy, but the party did not sue out his writ of liberate (q) till three days after the issuing of the commission, the Court were in favour of the creditor, saying, that the goods were in the law's custody, and they gave judgment for the lien, although they admitted that the creditor was (9) A writ to the sheriff of a county to give possession of lands and goods extended. not absolutely interested till the delivery of the goods under the liberate. The lien, too, must be on the same property which has been originally entrusted. A pledge was made of various bills of lading, but a part of the cargo in question was disposed of by the trader's agents abroad, and then an act of bankruptcy was committed by the merchant who had made the deposit. He, however, persuaded the agents to replace these goods by others, and sent the fresh bills of lading to his pawnees, but the Court held, that these substituted goods must pass to the assignees, not having been in the least alluded to in the original transfer. So, where goods had been pledged for the express purpose of securing the amount of certain bills which had been taken up by acceptors, but the owner had paid the debt incurred by such acceptances, and had entered into fresh obligations in respect of other bills taken up subsequently by the same acceptors; it was held, an act of bankruptcy having intervened, that the goods could not remain liable for the subsequent bills, and that there was no lien to prevent them from becoming the property of the assignees. 5 Taunton, 74, Meyerv.Sharpe. 5 Price, 593, Birdwood v. Raphael. Equitable liens are not favoured by the Courts; they Equitable liens. exist only in equity; and, it is said, that "there is not any difference between the rules of decisions in courts "of law and courts of equity, respecting liens on the goods of one man in the possession of another." The cases upon this subject are so much connected with Montagu on purchases of land, deposits of leases, mortgages, &c. Lien, p. 76. that it will, perhaps, be deemed sufficient to refer the reader to the text-books on lien, it being desirable to confine this treatise as strictly as possible to matters of common occurrence amongst merchants. See Montagu Lien. |