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the authority cannot be revoked once the liability is incurred. Similarly, where the agent is to pay money to a third person, such authority is irrevocable as soon as the agent has contracted or bound himself to pay the money to that third person.

Stated broadly, it may be said, too, that where the authority is coupled with an interest, the agency is irrevocable unless by consent of the agent, and it is not even put an end to by the death, lunacy, or bankruptcy of the principal. An example of such an authority would be where A consigns goods to B, a factor, to sell at the market price, and retain part of the proceeds in consideration of B's making advances to A.



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By the Factors Act, 1889, several statutes relating to factors and mercantile agents were codified and simplified. A mercantile agent" is defined by Section 1 of the Act as one " having in the customary course of his business as such agent authority to sell goods, or to consign goods for the purpose of sale, or to buy goods or to raise money on the security of goods."

The Act deals in detail with dispositions by mercantile agents and by sellers and buyers of goods. For fuller information on these matters reference should be made to the Act itself. (i)

Factors are agents employed to buy, sell or otherwise deal with goods or merchandise consigned or delivered to them by or for their principal, for a consideration, which is usually on a commission basis. Such agents can sell the goods in their own names, can given warranties, receive payment and give receipts, give credit and pledge the goods. The factor has a lien on goods that come into his possession as factor, during the time they remain in his possession, for the amount of his commission; or, if he should have become surety for his principal, then to the extent of his liability—that is, he may retain the goods until the amount due or for which he is liable is paid or satisfactorily secured. He also has an insurable interest in the goods that come into his possession in the course of his business. The difference between a factor and a broker is that the factor has possession of the goods and may sell in his own name, whereas the broker has not possession of the goods and does not sell in his own name.


Brokers are agents who are employed to buy or sell goods or merchandise for other parties. They do not have possession of such goods, and therein differ from factors. When a broker

(i) See Appendix, p. 364.

completes a transaction he makes and signs an entry of the terms of the contract in his book; he then sends a Bought Note to the buyer and a Sold Note to the seller. The broker is in the first instance the agent of the seller, but when he has signed his book he is the agent of both parties, and the entry therein is sufficient to satisfy Section 4 of the Sale of Goods Act, 1893; and even if the entry has not been signed, if the Bought and Sold Notes agree, that is sufficient; but, where the notes differ and there is no signed entry in the book, the contract is void. A broker is not liable personally on the contract so long as he observes the general principles of agency.

Insurance Brokers.

Insurance brokers are agents who are employed to negotiate policies of insurance, usually marine. Before the premium is paid it is, nevertheless, regarded as paid as between the assured and the underwriter (k), but the assured pays the broker, and the broker pays the underwriter. The broker has a lien on the policy for the amount of the premium and charges due by the assured.

Commission Agents.

This term is usually applied to an agent acting for a foreign principal for an agreed commission. He usually has a right of stoppage in transitu where a vendor could stop the goods. Strictly speaking, he is not an agent (see definition) but a principal who takes a fixed remuneration instead of what profit he can get.


Shipbrokers are agents employed for a commission to negotiate the chartering of ships.


Stockbrokers are agents employed to buy and sell stocks and shares in accordance with the rules of the Stock Exchange for a commission, and the person who employs a stockbroker is bound by such rules, even if he does not know of them, so that he must indemnify the broker for everything done in accordance therewith. ()


Auctioneers are agents authorized to sell goods and merchandise by auction, for a recompense, usually a commission. The auctioneer has possession of the goods and a special (k) See post, p. 201.

(1) But see ante, p. 44, and post, p. 234, for fuller exposition.

property in them, and he has a lien on them for his charges. He is the agent of the seller; but, on the fall of the hammer, he becomes also the agent of the buyer and can sign the memorandum of sale so as to satisfy Section 4 of the Statute of Frauds and Section 4 of the Sale of Goods Act: but, as was decided in Bell v. Balls (1897), he must sign at the time of sale and not afterwards; and, as a general rule, the signature of the auctioneer's clerk is not sufficient to bind the purchaser. The auctioneer may receive the whole of the proceeds of goods sold; but only the deposit, and not the whole of the purchase money, on a sale of land (which includes houses and other buildings thereon). He has implied authority to sell goods without reserve and, even if he sells without reserve where a reserve has been placed on them by the seller, the buyer has a good title as against the seller unless, of course, he knew of the limitation of the auctioneer's authority.

The protection of market overt (m) does not extend to an auctioneer selling goods, and he is liable for the consequences of an inadvertent conversion; he can also be held liable personally for a breach of warranty of authority on the sale of goods.

Conversion is the act of any person who in any way unlawfully meddles with and exercises an act of ownership over the goods of another. In the case of Cochrane v. Rymill (1881), A advanced money to B on a bill of sale of his furniture. C, an auctioneer, by direction of B, and without notice of A's rights, sold the goods and handed the proceeds to B. It was held that A could recover from C, as the dealing with the goods amounted to conversion. The auctioneer is protected, however, if the goods are sent to him in the ordinary course of the business of the person who sends them; and he is not liable if he merely settles the price and takes no part in actually transferring the property, or in cases where he can claim the protection of the Factors' Act. Where no principal is disclosed, the auctioneer is liable personally on the contract and can sue in his own name.

While an auction is in progress, the full name and address of the auctioneer must be posted up in public view in the auction room, and the auctioneer must hold a licence, the cost of which is £10 annually.

The duties of an auctioneer are

(1) Not to delegate his duties to his employees, unless with special authority, or unless a special custom exists to that effect. If a person, known not to be a licensed auctioneer, is requested to sell goods by auction there is authority for him to employ a licensed auctioneer.

(m) See post, p. 138.

(2) He must sell for cash, except in cases where it is customary to take a cheque and he acts without negligence. (3) He must store the goods properly whilst he possesses them. (4) He should obtain the best price possible; and if he delivers the goods without receiving the price he is responsible to his principal.


Bankers are agents of their customers for the purpose of paying sums of money when ordered; but there are also other relations between the banker and his customer-those of either debtor or creditor, the relation depending on whether the customer's account is in credit or overdrawn. The banker is not a trustee for the customer and is not, therefore, accountable to him for profits made by use of the money deposited in the bank. In effect, the position is that the customer lends money to the banker, and the banker undertakes to repay the debt or any part of it to any person when and to whom the customer requires him to pay it. The banker must, therefore, pay cash against all cheques drawn by his customer, as there is an implied contract that he will honour all cheques of the customer to the extent of his credit balance, and also to the amount of any agreed overdraft, and if he fails to do so he is liable, as was held in Marzetti v. Williams (1830), for breach of contract, even though the customer may have suffered no actual loss or damage. He may also pay bills accepted by the customer payable at his bank (n), but he is not bound to do so. The banker must pay any part of the credit balance of the customer, but he is not bound to pay part of a cheque; so that if a customer's account is, say, £95 in credit and a cheque is drawn for £100, the banker need not pay the cheque at all. The difficulty could, obviously, be overcome by the payment of £5 to the customer's account by holder of the cheque who could then present the cheque, but this practice is of doubtful propriety and, in fact, as a rule, is not possible unless the banker has disclosed the state of the customer's account. It is improbable that a banker would do this, and it is certain that he is under an obligation not to do so in such a case.

A banker has a general lien on his customer's securities to secure any debit balance in the absence of special agreement, except those deposited for safe custody only. Where valuables or securities are deposited with a banker for safe custody only, he is not responsible for their loss if he is a gratuitous bailee, but if he charges a fee he is liable for negligence. Certificates of shares and bonds with bearer coupons are often deposited for collection

(n) See post, p. 104.

of dividends, and the banker cuts off the coupons when due and after obtaining payment he credits the customer's account with the amount.

A banker cannot recover from the payee money paid in error, as where he honours the cheque of a customer who has insufficient funds in his account; but he may recover from his customer as money paid at his request and for his benefit. Where a banker gives advice as to investments to his customer the position is doubtful as yet, but it was held in Banbury v. Bank of Montreal (1918) that a bank manager has no general authority to bind the banker by advice given, nor any special authority as regards a particular investment. If moneys are allowed to remain with the banker for six years without the account being operated upon, the Statute of Limitations applies, and the banker may retain the money as his absolute property. Bankers do not, however, insist on their legal rights, the custom being not to refuse to pay the money to the proper party but, at the same time, not to seek out claimants. The matter of cheques will be considered hereinafter. (0)


Partners are the agents of their firms, and they bind the other members of the firm in all matters relating to its general business. The Law of Partnership is dealt with in Chapter 5.


Servants are rarely expressly appointed as agents of the employer, and the authority vested in them is usually implied from circumstances. Where the employer authorizes his servant to make purchases from tradespeople and pays for the goods without demur, an implied agency is created and, so far as concerns the particular tradespeople, will continue until revoked by express notice to them.


Apart from express authority being given, a wife is an agent of her husband and has implied authority to pledge his credit for necessaries suitable to the style in which they live, and for nothing else; and even this implication is liable to be rebutted by proof that the husband makes the wife a sufficient allowance, or has forbidden her to pledge his credit.

Similarly, a wife, as housekeeper, has implied authority to pledge the husband's credit for such things as are necessary in the

(o) See post, p. 118.

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