A broker or factor is bound to ordinary care, and is liable for any negligence, error, or default, incompatible with the care and skill properly belonging to the business that he undertakes. (i) It is his business to sell; but the power to sell does not necessarily include the power to pledge. This rule was formerly applied with great severity; (j) but it seems to be now the law, aided by some statutes both of England and of this country, (k) that he may pledge the goods for advances made in good faith for his principal, and perhaps otherwise if distinctly for the use and benefit of the principal, (l) or for advances made to himself to the extent of his lien; (m) or, perhaps, if the owner has clothed the factor with all the indicia of ownership so as to enable him to mislead others, and the pledgee had no notice or knowledge that he was not owner. (n) But this has been denied in this country. (nn)1 The power of a factor to pledge for his own benefit the goods of a consignor cannot be considered as settled in this country. But it seems that * he may pledge negotiable paper intrusted to him by his principal, to a party who has no notice or knowledge of his want of title. (o)
(c) Houghton v. Matthews, 3 B. & P. 485; Morris v. Cleasby, 4 M. & Sel. 566; Gall v. Comber, 7 Taunt. 558; Peele v. Northcote, 7 Taunt. 478; Couturier v. Hastie, 8 Exch. 40; Bradley v. Richardson, 23 Vt. 720; Thompson v. Perkins, 3 Mason, 232; Wolff v. Koppell, 5 Hill (N. Y.), 458. Contra, Lewis v. Brehme, 33 Md. 412, 429; Sherwood v. Stone, 14 N. Y. 267. See Wolff v. Koppell, 2 Denio, 368, where conflicting opinions are given on this question by Porter and Hand, Senators.
(d) Swan v. Nesmith, 7 Pick. 220; Wolff v. Koppell, 5 Hill (N. Y.) 458; s. c. 2 Denio, 368; Couturier v. Hastie, 8 Exch. 40; Bradley v. Richardson, 23 Vt. 720.
(e) Bunnell v. Mason, 1 Story, 543.
(f) Lucas v. (ironing, 7 Taunt. 164; in Muhler v. Bohlens, 2 Wash. C C. 378, the defendants received consignments from the plaintiff, and engaged to sell them on a del credere commission, and to guarantee the debts. They sold to one Walters part of the goods, and when the money for which the goods were sold became due, they took Walters' bill of exchange for the amount and remitted the same to the plaintiff. They also purchased another bill of one Imbert, which they also remitted to the plaintiff, in part payment for sales of his goods. Walters and Imbert failed, ami the bills were protested; and this action was brought to recover the amount on the defendants' guaranty. Washington, J.: "The guaranty of the defendants extended no further than to the sales and receipts of the money arising from them. As to Imbert's bill, therefore, there is no pretence for charging the defendants with that, as it was a bill purchased by the defendants from a man in good credit, and it was purchased for the purpose of a remittance, as the defendants had been directed. But the guaranty extends to Walters' bill which was not purchased with the proceeds of the plaintiff's goods, but was given by the purchaser of those goods instead of money If the defendants were bound to guarantee the payment of this debt when contracted, the guaranty continues, because a bill which is dishonored is no payment." (q) Henbach v. Mollman, 2 Duer, 227. (h) Graham v. Ackroyd, 10 Hare, 192.
A broker employed to sell has no authority to receive pay(i) Vere v. Smith, 1 Vent. 121.
(j) The factor cannot pledge the goods of his principal as security for his own debt. Paterson v. Tash, 2 Str. 1178. The principal may recover goods pledged by the factor, by tendering to him the sum due to him, without any tender to the pawnee. Daubigny v. Duval, 5 T. R. 604; M'Combie v. Davies, 7 East, 5; Solly v. Rathbone, 2 M. & Sel. 298. See also* De Bouchout v. Goldsmid, 5 Ves. 211; Martini v. Coles, 1 M. & Sel. 140; Fielding v. Kymer, 2 Br. & B. 639; Quieroz v. True-man, 3 B. & C. 342; Kinder v. Shaw, 2 Mass. 398; Odiorne v. Maxcy, 13 Mass. 178; Bowie v. Napier, 1 McCord, 1; Van Amringe v. Peabody, 1 Mason, 440; Whit-aker on Lien, 123, 136; Rodriguez v. Heffernan, 5 Johns. Ch. 429; Nowell v. Pratt, 5 Cush. 111. He cannot barter the goods of his principal, but must sell them outright. Guerreiro v. Peile, 3 B. & Ald. 616.
(k) See ante, p. *58, n. (h), for statutes which regulate the power of the factor to pledge the goods of his principal. For interpretations of these acts, see Stevens v. Wilson, 6 Hill (N. Y.), 512; s. c. 3
Denio, 472; Zachrison v. Ahman, 2, Sandf. 68; Jennings v. Merrill, 20 Wend. 1; Navulshaw v. Brownrigg, 2 De G., M. & G. 441.
(l) Mann v. Shiffner, 2 East, 523; M'Combie v. Davies, 7 East, 5; Solly v. Rathbone, 2 M. & Sel. 298; Pultney v. Keymer, 3 Esp. 182. "A factor may deliver the possession of goods on which he has a lien to a third person, with notice of the lien and with a declaration that the transfer is to such person as agent of the factor, and for his benefit." Kent, C. J., Urquhart v. Mclver, 4 Johns. 103, 116.
(m) Id. First National Bank v. Boyce, 85 Ky. 42. Contra, Merchants' Bank v. Trenholm, 12 Heisk. 520.
(n) Boyson v. Coles, 6 M. & Sel. 14; Williams v. Barton, 3 Bing. 139.
(nn) Michigan State Bank v. Gardner, 15 Gray, 362.
(o) Collins v. Martin, 1 B. & P. 648; Treuttell v. Barandon, 8 Taunt. 100; Miller v. Boykin, 70 Ala. 469; Miller v. Pollock, 99 Pa. 202; Morris v. Preston, 93 Ill. 215; Exchange Bank v. Butner, 60 Ga. 654.
1 Such a pledge is not good unless protected by statute. Cole v. Northwestern Bank, L. R. 10 C. P. 354; Johnson v. Credit Lyonnais Co., 3 C. P. D. 32; Allen v. St. Louis Bank, 120 U. S. 20; Gray v. Agnew, 95 Ill. 315; McCreary v. Gaines, 55 Tex. 485. See also City Bank v. Barrow, 5 App. Cas. 664.
ment; and in a case in New York it was not permitted to overcome this rule by proof of usage. (oo)
A principal does not, in general, lose his property in his goods by any act of the factor, as long as he can trace and identify them, either in the factor's hands, or into the hands of any representative of the factor, who holds them only in the factor's right, and not in his own independent right, as purchaser, pledgee, etc. (p)