This section is from the book "The Law Of Contracts", by Theophilus Parsons. Also available from Amazon: The law of contracts.
* The factor and the principal may sometimes have con- * 97
(z) Paterson v. Gandasequi, 15 East, 62; Addison v. Gandasequi, 4 Taunt. 574. The following authorities distinguish the foreign and domestic factors: Gonzales v. Sladen, Bull. N. P. 130; I)e Gaillon v. L'Aigle, 1 B. & P. 368; Thomson v. Davenport, 9 B. & C. 78; Kirkpatrick v. Stainer, 22 Wend. 244.
(a) Green v. Kopka, 2 Jur. (N. s.) 1049. In this case it is declared that "there is no rule of law that a person contracting in England as agent of a foreign principal is personally liable on the contract. In all cases, whether the principal or agent is liable is a question of intention, to be ascertained by the terms of the contract and the surrounding circumstances." In Thomson v. Davenport, 9 B. & C. 78, a purchaser in Liverpool represented that he bought for persons in Scotland, but did not mention their names. The seller did not inquire who they were, and debited the party purchasing; and it was held that he might afterwards sue the principal for the price. Lord Tenterden, C. J., said: " There may be another case, and that is where a British merchant is buying for a foreigner. According to the universal understanding of merchants and of all persona in trade, the credit is then considered to be given to the British buyer, and not to the foreigner.
originally (and in strictness perhaps still is) a question of fact; but the inconvenience of holding that privity of contract was established between a Liverpool merchant and the grower of every bale of cotton which is forwarded to him in consequence of his order given to a commission merchant at New Orleans, or between a New York merchant and the supplier of every bale of goods purchased in consequence of an order to a London commission merchant, is so obvious and so well known that we are justified in treating it as a matter of law, and saying that in the absence of evidence of an express authority to that effect, the commission agent cannot pledge zis foreign constituent's credit." Armstrong v. Stokes, L. R. 7 Q. B. 598, 605; quoted with approval in Maspons v. Mildred, 9 Q. B. D. 530, 541. See also Elbinger Actien-Gesellschaft, etc. v. Claye, L. R. 8 Q. B. 313; Hutton v. Bulloch, L. R. 8 Q. B. 331; L. R. 9 Q. B. 572; Kaltenhach v. Lewis, 24 Ch. D. 54; 10 App. Cas. 617.
In this country the question is generally treated as a question of fact depending on the intention of the parties in each case as in the case of the agent of a domestic principal. Oehricks v. Ford, 23 How. 49; Berwind v. Schultz, 25 Fed. Rep. 912; Maury v. Hanger, 38 La. An. 485; Bray v. Kettell, 1 Allen, so; Kaulback v. Churchill, 59 N. H. 296; Kirkpatrick v. Stainer, 22 Wend. 244: Taintor v. Prendergast, 3 Hill, 72. Contra, Rogers v. March, 33 Me. 106. And see Vawter v. Baker. 23 Ind. 63.
1 Vawter v. Baker, 23 lud. 63.
flicting claims against a purchaser; as the factor for his lien for advances, etc., and the principal for his price. In general it may be said that a purchaser who pays to either, will be protected against the other, if he has no notice or knowledge of any valid claim or right belonging to the other. (c) But, excepting when such rights exist in the factor, the principal has a higher right than he, and may enforce a contract with a third party for his own benefit. A factor may buy and sell, sue and be sued, collect money, receive payments, give receipts, etc., in his own name; but a broker, only in the name of his principal. (d) 1 A factor has a lien on the property in his hands, for his commissions, advances, and expenses; (e)2 but whether the possession of a bill of lading duly indorsed gives the factor a right to take possession of the goods and hold them by his lien, is uncertain. We should doubt whether the bill of lading, alone, would give him such a right. (f)3 But a factor who accepts a bill drawn on goods, which goods are in the hands of a third person to be delivered to the factor, acquires undoubtedly a lien on the goods as against an attaching creditor. (g) The consignor may always transfer the goods to a third person free from any lien or claim of the factor on them to secure his debt, if he transfers them before they come into the hands of the factor. (h) Nor has a factor any lien on goods in his hands, unless they came to him as factor. (i)
(c) Drinkwater v. Goodwin, Cowper, 251; Atkyns v. Amber, 3 Esp. 493; Cop-pin v. Craig, 7 Taunt. 243; Hudson v. Granger, 5 B. & Ald. 27.
(d) Baring v. Corie, 2 B. & Ald. 143; Hearshy v. Hichox, 7 Eng. (Ark.) 125.
(e) Williams v. Littlefield, 12 Wend. 362; Holbrooke v. Wight, 24 Wend. 169. The factor has a general lien, to secure all advances and liabilities, upon all goods which come to his hands as factor. Godin v. London Ass. Co. 1 Burr. 494; Holling-worth v. Tooke, 2 H. Bl. 501; Cowel v.
Simpson, 16 Ves. 276; Stevens v. Robins, 12 Mass. 180; Bryce v. Brooks, 26 Wend. 367; The Frances, 8 Cranch, 419; Dixon v. Stansfield, 10 C. B. 398. And the factor obtains an interest sufficient to support his lien, upon accepting a draft drawn upon the faith of the goods. Nesmith v. Dyeing, etc. Co. 1 Curtis, 130; Bank of Rochester v. Jones, 4 Comst. 497; Vail v. Durant, 7 Allen, 408.
(f) See, however, Rice v. Austin, 17 Mass. 197; Patten v. Thompson, 5 M. & Sel. 350.
1 A broker cannot sue in his own name upon contracts made by him as a broker, Fairlie v. Fenton, L. R. 5 Ex. 169; nor, although signing a contract note as selling as broker for an undisclosed principal, can he sue as principal in the contract. Sharman v. Brandt, L. R. 6 Q. B. 720. Likewise a broker, signing a contract note in terms, " I have this day sold by your order and for your account to my principals," is not, in the absence of usage, personally liable on the contract. Southwell v. Bow-ditch, 1 C. P. D. 374. - K.
2 Commission merchants making advances on goods insured by them which are burned without their fault, have the same lien on the insurance money when collected as they had on the goods. Johnson v. Campbell, 120 Mass. 449. Also where an agent has advanced money or incurred liability for a principal, and the latter becomes insolvent while the agent has in his possession or within reach the proceeds or fruit of the advances, he has a lien upon them before they come into the principal's actual possession. Muller v. Pondir, 55 N. Y. 325. See Brown v. Coombs, 63 N. Y. 598; Daniel v. Swift, 54 Ga. 113. - K.
 
Continue to: